3 Stocks With Upgraded Broker Ratings to Buy Amid AI-Related Headwinds

Market Overview - February has started with a subdued market sentiment, characterized by an AI-driven sell-off in U.S. stocks as investors reassess high expectations [1] - Concerns have emerged regarding the potential erosion of pricing power for software stocks due to AI tools, alongside fears of a slowdown in hyperscaler AI capital expenditures impacting chip and data-center suppliers [1] - The market is seeking clearer monetization strategies and disciplined spending from companies [1] Investment Recommendations - Retail investors may find it challenging to identify stocks for solid long-term returns, but following broker recommendations can simplify this process [2] - Stocks such as Jacobs Solutions Inc. (J), Envista Holdings Corporation (NVST), and Tapestry, Inc. (TPR) are highlighted as potential investment opportunities [2] Broker Insights - Brokers develop informed views by engaging with senior management, analyzing public disclosures, and participating in earnings calls, which helps contextualize a company's fundamentals within the broader economic landscape [3] - Upgrades from brokers are often based on new evidence, such as updated guidance or channel checks, which can indicate an inflection point before it is reflected in market consensus [4] Stock Screening Strategy - A screening strategy is proposed to identify potential winning stocks, focusing on those with broker rating upgrades of 1% or more over the past four weeks [6] - Stocks must have a current price greater than $5 and an average 20-day trading volume exceeding 100,000 to ensure liquidity [6] Specific Stock Performances - Jacobs Solutions is expected to see a 16.5% year-over-year increase in fiscal 2026 earnings and has experienced a 6.3% upward revision in broker ratings recently [9] - Envista Holdings, with a diversified portfolio in dental solutions, is projected to have a 17.7% increase in earnings for 2026 and has seen an 18.5% upward revision in broker ratings [10] - Tapestry is anticipated to achieve a 19% year-over-year earnings growth in fiscal 2026, with a 5% increase in broker ratings [11]