Buy Broadcom, DraftKings, Wix, Goldman Sachs stocks: Oppenheimer

Analysts at Oppenheimer, the investment company with over $126 billion in assets under management (AUM), have identified a few companies they believe will do well for the next twelve months. Some of the most notable names in the list are Broadcom, DraftKings, Wix.com, and Goldman Sachs.

The company has also identified companies like XPO, Maplebear, AppLovin, Timken, and International Flavors & Fragrances. AppLovin is a notable one because it was also mentioned in Citi’s list of the most promising stocks to buy. 

Broadcom

Broadcom, the parent company of Symantec, CA Technologies, and VMware, is one of the most crowded stocks in Wall Street. Data shows that the company has over 4.65 billion in outstanding shares, of which 409 millions of them are held by ETFs. Its biggest allocation is in the Invesco QQQ and the Invesco PHLX Semiconductor ETF.

Investors love Broadcom because of its strong growth and dividends. Its annual revenue has moved from $22.5 billion in 2019 to over $35.8 billion in the last financial year. Some of this growth has been because of its giant acquisitions, including that of VMware, for over $69 billion. 

Broadcom is at the intersection of the semiconductor, AI, and Software as a Service (SaaS) industries, making it an interesting stock. Its most recent earnings showed that revenue rose by 43% to over $12.48 billion, helped by its AI demand and VMware. AI revenue soared to $3.1 billion.

Broadcom expects that its revenue for the year will be $51 billion while its adjusted EBITDA will be 61% of its revenue or $31.1 billion. In their note, analysts at Oppenheimer noted that Broadcom had: 

“one of the most strategically and financially attractive business models in semiconductors.”

Read more: Nancy Pelosi invests in Broadcom, trims Tesla holdings amid AI boom

DraftKings

DraftKings stock price has underperformed the market this year as it fell by 1.28% while the Nasdaq 100 and S&P 500 indices are sitting at their all-time highs. 

It is not alone as other companies in the industry like Entain, Flutter Entertainment, and Sportradar have underperformed the market. There are signs that the industry is slowing after booming during the pandemic era. In their note, analysts at Oppenheimer said that the company,

“Will be a critical player in accelerating the shift in US sports betting from $150 billion wagered illegally/offshore to licensed domestic operators.”

DraftKings revenues rose by 26% in the second quarter to $1.1 billion while its adjusted EBITDA stood at $128 million. It also boosted its full-year revenue guidance to $5.05 billion, or a 38% growth rate, helped by its Jackpocket acquisition and entry into Washington state. 

However, it lowered its EBITDA guidance to between $340 million and $420 million because of higher taxes and promotions.

Wix.com

Wix, a provider of website-building solutions, is another stock that Oppenheimer believes will do well in the next 12months. The stock is already up by 38% this year and was boosted by the acquisition of Squarespace by Permira in a $6.9 billion deal. This buyout raised the chances that Wix too could be acquired in the future.

Wix has done well this year as its revenue rose by 12% in the second quarter to $435 million. This growth was driven by new customer additions and adoption of its tools like Wix Studio. Business solutions revenue rose by 20% to $123 million while its partner’s revenue jumped by 29%.

Wix has also rewarded its shareholders by spending over $1 billion in share repurchases, a move that has reduced its outstanding shares to 55.6 million.

Goldman Sachs

Goldman Sachs stock has shined this year, rising by over 28% and bringing its total market cap to over $168 billion. It has risen by over 148% in the last five years. 

Goldman Sachs has struggled in the past few years as the dealmaking industry slumped. This is notable because the company’s key business is in the investment banking sector. 

This trend could change when interest rates start falling and if Donald Trump wins the presidency. Indeed, there are signs that deal volume has increased in the past few months, which could benefit the company. 

Read more: Evercore, Lazard, Piper Sandler stocks rise as deals recover

Goldman Sachs had a strong second quarter as its net revenue rose to over $12.7 billion, bringing the YTD figure to $26.94 billion. Its net earnings rose to $3 billion. 

By segment, the global banking and markets division generated $8.18 billion in revenues while its asset and wealth management brought in $3.8 billion. Its advisory revenue was $688 million while its platform solutions rose to $669 million.

Oppenheimer analysts believe that Goldman Sachs has a strong franchise and multiple cost, revenue, and capital optimization strategies it can implement.