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Top Stock Picks for Week of August 31, 2026

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Wayfair Inc. (W - Free Report) is an online seller of home goods products, consisting of furniture and home decor. Wayfair, a Zacks Rank #1 (Strong Buy), has quietly become one of the most compelling turnaround stories in retail. Wayfair continues to outpace the broader home furnishings market through sustained market share gains, supported by its broad product assortment, expanding logistics capabilities and initiatives such as loyalty, verified products, physical retail and specialty brands. Wayfair continues to leverage AI, mobile engagement and loyalty programs to improve merchandising, personalization and marketing efficiency. Second-quarter 2026 results reflected continued growth in revenue, orders, active customers and average order value, while adjusted EBITDA margin and free cash flow improved meaningfully. Shares closed roughly 30% higher on the day of the latest earnings report, one of the largest single-session moves for a large-cap retailer this year. Our model projects revenue growth of 6.5% for 2026 and 5.2% for 2027. Balance-sheet quality continues to improve alongside stronger cash generation.  

Caterpillar, (CAT - Free Report) known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. Caterpillar’s outlook is supported by broad demand across construction, mining and power markets, with rising sales to users and a record backlog improving revenue visibility. Order momentum remains strong across all primary segments. Power & Energy is benefiting from data-center power needs and healthy oil and gas activity, while capacity additions expand the company’s ability to serve multi-year demand. The Construction Industries segment remains supported by infrastructure, rental fleet investment and large projects. Mining demand is aided by elevated fleet age, commodity investment and technology adoption. Higher services revenues and cash generation add resilience and support shareholder returns. Caterpillar’s balance sheet and cash generation provide flexibility to fund capacity growth while continuing shareholder distributions. The company is positioned to benefit from opportunities across both developed and emerging markets. Earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.  

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