Buy these five stocks with upside ahead of earnings, Bank of America says


 

Buy These Five Stocks With Upside Ahead of Earnings, Bank of America Says

By Steven Orlowski, CFP, CNPR | April 20, 2025

As first-quarter earnings season heats up, Bank of America is spotlighting five stocks it says have clear upside potential—and it's encouraging investors to act before these companies report.

In a research note to clients this week, the bank’s equity analysts said these names are "well-positioned for earnings beats and positive revisions," driven by improving fundamentals, strong pricing power, or underappreciated catalysts. Here's a closer look at the five stocks Bank of America is betting on ahead of earnings.

1. Nvidia (NVDA)

Sector: Technology
Upside Drivers: AI dominance, robust data center growth

Nvidia continues to lead the charge in artificial intelligence, and Bank of America says the company’s upcoming earnings could surprise to the upside once again. Analysts cite surging demand for AI infrastructure and accelerating GPU shipments to cloud providers as key drivers.

"We see continued strength in data center revenue and expect margin expansion as supply constraints ease," BofA noted.

With shares already up significantly over the past year, BofA believes there's still room to run.

2. Delta Air Lines (DAL)

Sector: Industrials
Upside Drivers: Strong travel demand, cost control, international momentum

Delta has been quietly outperforming its peers, and Bank of America thinks the market hasn’t fully priced in the rebound in premium international travel.

"Delta's operational execution and favorable mix of high-margin routes set it apart," analysts wrote.

The bank expects positive surprises on unit revenue and cost guidance, especially as fuel costs stabilize.

3. Costco (COST)

Sector: Consumer Staples
Upside Drivers: Membership growth, inflation resilience, strong traffic

Costco remains a steady performer in volatile markets. BofA sees upside in its unique membership model and the pricing power it wields with suppliers.

"We expect a solid earnings beat driven by strong same-store sales, especially in food and essential categories," the note said.

Analysts also pointed to ongoing international expansion and digital growth as long-term tailwinds.

4. Advanced Micro Devices (AMD)

Sector: Technology
Upside Drivers: AI GPU ramp-up, strong embedded and client demand

AMD’s recent product launches in AI accelerators could mark an inflection point, BofA argues. While the stock has been volatile, the firm expects AMD to deliver a “clean” earnings print and provide upbeat guidance.

"The MI300 series is ramping faster than expected, and we're bullish on server share gains," analysts said.

BofA sees the valuation as attractive relative to future growth.

5. UnitedHealth Group (UNH)

Sector: Healthcare
Upside Drivers: Resilient earnings model, strong Medicaid and Medicare growth

UnitedHealth remains a bellwether in the managed care space, and Bank of America sees stable earnings growth despite macro headwinds.

"Membership gains and strong Optum performance are key reasons we expect a beat," BofA stated.

The bank adds that recent volatility in health stocks may present a buying opportunity before earnings.

Bottom Line

With market volatility still a factor, earnings season offers both opportunity and risk. Bank of America’s latest picks highlight a mix of growth, resilience, and underappreciated catalysts across sectors. While no investment is without risk, these five stocks could deliver meaningful upside for investors who act ahead of earnings.

As always, investors should consider their risk tolerance, diversify appropriately, and do their own due diligence before making decisions based on analyst recommendations.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always consult with a financial advisor before making investment decisions.

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