Wall Street has been enjoying an impressive bull run for the past one and a half months after completing a terrible first half of 2022. Although the three major stock indexes are in negative territory year to date, their recovery from the recent lows recorded i mid-June is incredible.

From Jun 17 to Aug 16, the Dow advanced 15.2% and the S&P 500 appreciated 18.4%. As of the same date, the Nasdaq Composite surged 24% since Jun 16. We have selected five U.S. corporate behemoths with a favorable Zacks Rank that have provided higher returns than the market’s benchmark S&P 500 Index in the past month.

These companies are — Tesla Inc. (TSLA Quick QuoteTSLA - Free Report) , Airbnb, Inc. (ABNB Quick QuoteABNB - Free Report) , Cadence Design Systems Inc. (CDNS Quick QuoteCDNS - Free Report) , Texas Instruments Inc. (TXN Quick QuoteTXN - Free Report) and NextEra Energy Inc. (NEE Quick QuoteNEE - Free Report) .

Future Catalysts of U.S. Economy

On Aug 16, 2022, President Joe Biden signed a $430 billion Inflation Reduction Act. The size of the allotted money may rise up to $737 billion in 10 years. Democrats have estimated that the act will reduce the government deficit by more than $300 billion.

The act has provisions of $390 billion to combat climate change. Per the Biden administration, the most important way to restore a clean climate is to encourage Americans to shift toward electric vehicles. Democrats are of the opinion that the legislation will reduce carbon emissions 40% by 2030.

On Aug 10, 2022, President Biden signed the CHIPS and Science Act that will provide $52.7 billion to microprocessor developers for five years. The Biden administration has expressed concerns that the United States had a 37% share in global semiconductor and microelectronic production in 1990, which drastically dropped to just 12% in 2021.

Consequently, U.S. businesses, especially the auto and high-tech industries are suffering from an acute shortage of chipsets owing to the breakdown of the global supply-chain during the pandemic.

On Nov 15, 2021,  President Biden signed a bipartisan infrastructure act of $550 billion in addition to the previously approved funds of $450 billion for five years. The law aims at establishing the United States with the world's best economic infrastructure. Total spending may go up to $1.2 trillion if the plan is extended to eight years.

The infrastructure development law will provide $100 billion toward roads, bridges and other major projects. It will invest $66 billion in freight and passenger rail, including potential upgrades to Amtrak. The project will provide $11 billion toward reducing car crashes and fatalities through a “Safe Streets for All” program. The law allocates $39 billion for modernizing public transit and improving access for disabled people.

In addition, the law has proposed $66 billion for passenger and freight rail, $15 billion for electric vehicles and buses, and $17 billion for airports, ports and waterways. The project will invest $50 billion in water infrastructure and $55 billion in clean water projects. Moreover, $65 billion will be invested in high-speed Internet (broadband), $21 billion in environmental clean-up and $73 billion in power infrastructure.

Our Top Picks

We have narrowed our search to five U.S. corporate giants that have popped in the past month. These stocks have strong upside left for the rest of 2022 and have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the price performance of our five picks in the past month.

Image Source: Zacks Investment Research

Tesla has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA’s overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. Tesla is expected to be the largest beneficiary of this trend.

Despite the chip crisis, Tesla reported strong deliveries of 254,695 units in second-quarter 2022, up 27% year over year. Additionally, TSLA’s energy generation and storage revenues are growing, thanks to the positive reception of the Megapack and Powerwall products.

TSLA has an expected earnings growth rate of 74.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.4% over the last 30 days. The stock price has jumped 27.4% in the past month.

NextEra Energy is expanding domestic clean energy assets through acquisitions and organic initiatives. NEE has stakes in natural gas pipelines in Texas and gains from an increase in natural gas production.

To enhance flexibility, NextEra Energy completed a few financing agreements to secure funds for acquisition. NEE benefits from declining installation costs and improving renewable technology. It has sufficient liquidity to meet obligations.

NextEra Energy has an expected earnings growth rate of 12.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. The stock price has appreciated 16.8% in the past month.

Cadence Design Systems offers products and tools that help customers design electronic products. Through the System Design Enablement strategy, CDNS offers software, hardware, services and reusable IC design blocks to electronic systems and semiconductor customers.

Cadence’s performance is being driven by strength across segments like digital & signoff solutions and functional verification suite. CDNS is also gaining from higher investments in emerging trends like IoT and autonomous vehicle sub-systems along with strength in the semiconductor end-market. Frequent product launches are expected to help CDNS sustain top-line growth.

Cadence Design Systems has an expected earnings growth rate of 24.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.7% over the last 30 days. The stock price has surged 24.2% in the past month.

Airbnb is riding on an improvement in the travel industry. Continuoued recovery in both longer-distance and cross-border travel owing to a reduction in travel restrictions is benefiting ABNB’s Nights & Experience bookings. Additionally, growth in Average Daily Rates and Gross Booking Value remain tailwinds.

Growing active listings in Latin America, North America and EMEA are contributing well to the top-line. Further, growing sales and marketing initiatives along with continuous efforts to upgrade various aspects of the Airbnb service are helping the company gain momentum among hosts and guests.

Airbnb has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 15.8% over the last 30 days. The stock price has climbed 27.1% in the past month.

Texas Instruments is benefiting from a continued rebound in the automotive market. A solid demand environment in the industrial end market contributed well. Growing momentum across the communication equipment and enterprise systems markets will benefit TXN in the long haul.  

Additionally, the strong performance of Analog and Embedded Processing segments contributed well. Solid investments in new growth avenues and competitive advantages are acting as a tailwind for TXN. Further, the company’s portfolio of long-lived products and efficient manufacturing strategies are the other positives.

Texas Instruments has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 6.5% over the last 30 days. The stock price has advanced 14.8% in the past month.