These 7 Stocks Are Analyst Favorites For Magnificent Earnings Growth; AI Play Tests Buy Point

After the stock market started 2026 with tempered gains, it’s important to watch the stocks that are most loved by equity analysts.

GE Aerospace (GE), Fabrinet (FN) and Arista Networks (ANET) are three of the seven best stocks where investors can find magnificent profit growth prospects. But stock market weakness has forced many top-rated stocks to tumble. So investors must be cautious with any new purchases.

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GE Aerospace Near New Highs

GE Aerospace broke out of a flat base Feb. 19 but fell 3% below the 332.79 buy point amid broad market selling, according to IBD MarketSurge. The stock is holding above the important 50-day moving average.

The stock bounced back from a 7% tumble on Jan. 22, when the company’s fourth-quarter results beat analysts’ expectations but investors seemed concerned about slowing growth.

More recently, Morgan Stanley analyst Kristine Liwag initiated coverage of the stock in February with a 425 price target. That made it one of the highest analyst estimates for GE. Liwag praised the company’s ability to fend off potential competitors and noted that demand should remain steady for GE aircraft engines.

The company makes jet engines and aerospace products. The bulk of the company’s revenue comes from its Commercial Engines & Services business, where sales increased 24% year over year in the fourth quarter.

Analysts believe the company has landed on a number of megatrends in commercial aerospace, defense, shipbuilding and space. GE Aerospace could reach a $1 trillion market cap within as early as five years, a Citi analyst said in December.

GE Aerospace has an EPS Rating of 96, following EPS gains of 82%, 38%, 44% and 19% the past four quarters.

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Of 23 analysts who cover the company, 20 have buy or outperform ratings. The consensus 2026 earnings estimate is for a 16.7% year-over-year increase, according to FactSet.

Arista Networks

Arista Networks (ANET) has the highest EPS Rating in the computer networking industry group, a perfect 99. That high score comes after the company posted earnings gains of 30%, 38%, 25% and 24% the past four quarters, including the most recent quarterly report.

Fourth-quarter earnings topped estimates and the company raised 2026 revenue guidance, with artificial intelligence-related sales expected to double. It raised its full-year revenue growth outlook from 20% to 25%.

Arista also raised its 2026 AI networking revenue outlook to $3.25 billion from $2.75 billion.

Arista sells computer network switches that speed up communications in internet data centers. It has a formidable rival in Nvidia (NVDA). Both companies are targeting an emerging market for networking technology that connects clusters of AI servers in cloud-computing data centers.

In January, UBS named Arista a top pick for 2026.

Arista is forming a cup base with an early entry at 151.80. The stock has a 92 Composite Rating. Of 27 analysts covering the company, 93% have buy or outperform ratings.

Sterling Infrastructure Earnings

Sterling Infrastructure (STRL) stock broke out of a cup base but it is now 5% below the 419.14 buy point amid broad market weakness.

The heavy construction company has the highest EPS Rating (99) in its industry group, following accelerating earnings gains of 30%, 41%, 58% and 78% the past four quarters, according to MarketSurge.

While the company works on highways, bridges and other typical civil projects, its largest and highest-margin business is data centers and other tech-related construction. In the third quarter, revenue from the data center market grew more than 125% year over year. The company says its backlog and other expected work in tech infrastructure totals about $3 billion, much of it in data centers.

Analysts say rising power demand from data centers and manufacturing reshoring, combined with increasing utility capital spending, is driving record backlogs.

Sterling Infrastructure has guided full-year adjusted EPS of $10.35-$10.52.

Only seven analysts cover Sterling, and all have buy or outperform recommendations. The average price target is 492.83, according to FactSet.

Fabrinet Earnings

Fabrinet broke out of an 11-week pattern Feb. 20 but has returned to the 531.22 buy point. A rebound from that level should be regarded as a positive sign, but market risk makes a purchase right now too risky.

The stock quickly rebounded from a 15% two-day sell-off that followed the Feb. 2 earnings report, even though results beat views.

December-ended quarter earnings rose 29% to $3.36 per share on sales of $1.13 billion, a 36% increase, according to MarketSurge, with both showing accelerating growth yet again.

Fabrinet sees first-quarter EPS of $3.45-$3.60, indicating another quarter of faster year-over-year growth. Its revenue target of $1.15 billion to $1.2 billion would maintain the rapid sales pace.

Fabrinet, the No. 1 stock in the contract manufacturing industry, makes optical communications gear, a method of sending data over long distances with high-speed light pulses. Fabrinet also produces optical modules that are essential for AI data centers.

Of 12 analysts who cover Fabrinet, 11 have buy or outperform recommendations. The other has a hold rating. Analysts at Rosenblatt Securities and Northland Securities this month raised their price targets to 715 and 700, the highest estimates.

Comfort Systems Earnings

Comfort Systems (FIX) climbed to a record high after it released its Q4 report on Feb. 19, but shares have eased. The company blew by estimates, as a $2.6 billion jump in its order backlog indicated that growth will continue.

Comfort’s outstanding growth comes as data center construction drives demand for the cooling and heating company. In its previous quarterly report, it cited “unprecedented demand” that made its backlog grow to over $9 billion for the first time, and $3.4 billion higher than when 2025 began.

The company has posted accelerating EPS gains of 67%, 75%, 102% and 129% the past four quarters, sending its EPS Rating to a pristine 99. That’s the highest in IBD’s air conditioning and heating products industry group. Comfort Systems also has one of the highest Composite Ratings in its industry group, at 99.

Of 10 analysts covering the company, eight have top recommendations and the rest have hold ratings.

The company specializes in heating, ventilation and air conditioning (HVAC) products, as well as electrical services for commercial and industrial buildings. Comfort Systems’ backlog is swelling thanks largely to demand for data centers, which require massive cooling.

Shares are now extended above the most recent buy point at 1,020.26, falling nearly 7% Thursday. Investors should wait for a new pattern to emerge before considering a purchase of shares.

Celestica Leads Industry Group

Celestica (CLS) has the highest EPS Rating (99) in the contract manufacturing industry group, which ranks in the top 35 of 197 groups.

The Toronto-based company reported Jan. 28 fourth-quarter earnings of $1.89 a share, a 70% increase, on sales of $3.654 billion, up 44%. The consensus EPS estimate was $1.68 on sales of $3.506 billion.

Shares sold off the next day as the company’s operating-margin forecast for 2026 was unchanged, despite that it raised its revenue and profit outlook. That alarmed some analysts. The stock is meeting resistance at the 50-day line but continues to form a base with a 363.40 buy point. Watch for shares to hold above the 200-day line.

There’s heavy demand for Celestica’s rack integration services for data centers and the connectivity gear that handles AI workloads. The company is a key supplier for hyperscalers such as Alphabet (GOOGL) and Meta Platforms (META).

Celestica also has partnerships with Broadcom (AVGO), Advanced Micro Devices (AMD), Intel (INTC) and others for various products.

Twenty of the 23 analysts covering Celestica, 20 have buy or overweight ratings and the rest have hold ratings.

Construction Partners Stock

Construction Partners (ROAD) is a leader in the highflying heavy-construction industry. Its shares have turned back after trying to break out from the 138.90 buy point of a cup-without-handle base. It is holding above the 50-day line so far despite an 8% slide Thursday.

The stock started rallying Feb. 5, when Construction Partners beat December-quarter sales and earnings expectations and raised its outlook for the fiscal year ending in September. As with many other heavy-construction companies, Construction Partners is enjoying high demand for factory, data center and civil construction work. Its backlog has swelled to more than $3 billion.

“Project demand throughout our footprint remains strong,” CEO Fred “Jule” Smith told analysts in the earnings conference call. “On the commercial side of the business, steady project bidding is supported by ongoing population migration to the Sunbelt.”

Reshoring trends, as more manufacturing and supply-chain capacity moves back to the U.S., and the buildout of AI infrastructure are also driving growth.

While data center work occupies much of the company’s business, executives say there’s plenty of activity building factories, distribution centers and other projects.

Construction Partners has a 99 EPS Rating after posting EPS gains of 38%, 89% and 88% the past three quarters. The stock also has a 99 Composite Rating.

Only six analysts cover the company, and four have buy or outperform ratings. Two have hold recommendations.

Universe of S&P 500, S&P 400 And S&P 600 Stocks

To select companies for this list, IBD used a combination of FactSet data and IBD ratings.

The screening began with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. This index is a good representation of the U.S. stock market while eliminating less-liquid and lower-quality names.

The next layer of screening flagged companies showing FactSet consensus ratings of overweight or buy, the most bullish views. To further refine the list, we screened for stocks with strong analyst consensus earnings growth estimates for the current fiscal year. In the final cut, we selected stocks with high Composite and Relative Strength Ratings.

The final seven best stocks for outstanding earnings growth and estimates overlap with some Magnificent Seven stocks.

To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.

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