Bank of America said this week that a string of stocks are set to rally as the summer heats up. The firm said companies like Nvidia are in good shape heading into the second half of the year. CNBC Pro combed through Bank of America research and found compelling buy recommendations that can’t be ignored. Among them are Nvidia, Carnival, Block and Palantir Technologies. Carnival reported better-than-expected earnings in late June. Bank of America analyst Andrew Didla said in a recent note that this bodes well for the stock in the coming months. “Cruise spending remains healthy and CCL commented positively on its 2025 booking pace,” he wrote. Didla said management is executing after a challenging period that included headwinds from the COVID-19 pandemic. With cost reductions underway, the balance sheet “could help drive better valuation multiples,” the analyst said. “Stable fundamentals continue to provide opportunities for balance sheet improvement, which is a key part of our investment thesis,” Didla said.Carnival is down 7% in 2024, which makes the stock very attractive, the analyst added. He raised his price target to $24 a share from $23, which would imply a nearly 40% upside from Friday’s closing price. Block The payments company is down nearly 15% in 2024, but analyst Jason Kupferberg says the dip is worth buying. “While the stock has languished in recent months, sell-side expectations for ’24/’25 continue to rise,” he wrote. The firm pointed to several reasons for the stock’s disappointing performance, including management changes and weaker-than-expected quarterly reports from other software companies. Still, Kupferberg remains enthusiastic about buying Block shares. “We recognize the concerns regarding U.S. GPV, and we are pleased to see that the stock is still on track to perform at a faster pace than expected,” he wrote. [gross payment volume] Growth and Small Business [small and midsize businesses]”But we believe the stock is overly undervalued,” he said. Still, the company’s fundamentals remain strong, which is why the stock is attractive, Kupferberg said. “It’s an attractive valuation no matter how you look at it,” he added. Palantir Technologies The software company’s shares have soared nearly 60% this year, but analyst Mariana Pérez Mora said Palantir remains a solid buy ahead of its August earnings release. “The market appears to be underpricing the risks of the upcoming earnings release, which in our view provides an attractive entry point to hold PLTR options,” she wrote. The analyst also said the stock’s technicals remain solid. “PLTR maintains a bullish trend both on an absolute price basis and relative to the S&P 500,” she added. Mora also sees a number of positive catalysts on the horizon, including possible inclusion in the S&P 500 and expansion through the U.S. Department of Defense. “We’re still in the early stages” of AI adoption and expect Palantir (PLTR) to continue to see strong upside from this trend,” she said. Square: “Stock has been sluggish in recent months, but sell-side forecasts for ’24 and ’25 continue to rise… Attractive valuations by any standards… We recognize concerns about U.S. GPV [gross payment volume] Growth and Small Business [small and midsize businesses], but we believe the stock price is overvalued. “Nvidia: “Solid fundamentals, attractive valuation mitigate volatility. … However, volatility may be short-lived as GenAI hardware deployments are only in year two of a three-to-five year adoption cycle and the long-term opportunity is approximately $300 billion+, three times higher than this fiscal year. Benefits of NVDA’s next-generation purpose-built Blackwell AI accelerator systems will begin later this year with robust demand and visibility across cloud customers.” Carnival: “Cruise spending remains healthy and CCL commented positively on 2025 booking pace. … Stable fundamentals continue to provide opportunities for balance sheet improvement, which is a key part of our investment thesis. … Management was asked about dividend payouts on the conference call and the team continues to make debt reduction a top priority.” Palantir: “We are still in the early stages of AI adoption and expect this trend to continue to provide Palantir (PLTR) with significant upside. PLTR is also a strong performer against the S&P 500 (SPX) on an absolute price basis. “It maintains a bullish trend compared to … We believe the market appears to be underpricing the risks surrounding the upcoming earnings release, providing an attractive entry point to own PLTR options.”
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