Golden Cross Alert: 3 Stocks With Serious Upside Potential

Written by Chris Markoch

Finding value in a frothy market can be tricky. One signal that traders and investors use is the golden cross. This is when a stock’s 50-day moving average crosses above its 200-day moving average. This is a bullish signal that suggests the stock has momentum, particularly when it’s supported by strong fundamentals.

Golden cross patterns can serve as useful technical confirmation for traders looking to ride strong trends. But when those signals align with improving fundamentals, as they do with the three stocks in this article, the odds of sustained upside improve, which can make them attractive to longer-term investors.

A Rail Stock on the Move as Shipping Demand Picks Up

Our first stock takes us to Canada. CSX Corp. (NASDAQ: CSX) is known as a value stock. It has a dividend yield near 1.3% and a forward P/E of around 19x. However, CSX stock has recently been offering investors momentum and growth.

CSX stock formed a golden cross in mid-July and has continued to climb before and after the company’s earnings report on July 23.

CSX is one of the leading rail stocks and is often considered a bellwether for the industrial economy. Economic activity is expected to increase in the back half of 2025, supported by recent data suggesting freight volumes may have formed a bottom.

The company’s beat on the top and bottom lines shows that management’s focus on network efficiency and operating ratio improvements is paying off.

Adding to the fundamental case for CSX stock is the company’s ability to ratify a five-year collective bargaining agreement (CBA) with the Brotherhood of Locomotive Engineers and Trainmen (BLET).

CSX stock is trading within 8% of the analysts’ consensus price target of $37. However, several analysts have been raising their price targets since the earnings report. That includes Robert Baird with a revised target of $44.

Rumors of Alphabet’s Death Were Exaggerated

Alphabet Inc. (NASDAQ: GOOGL) has turned positive about a week after reporting earnings on July 24. Investors initially sent GOOGL stock lower but have turned more positive after digesting the company’s results.

Specifically, the company has managed to quiet concerns about its Google search business.

Alphabet posted accelerating growth in both cloud computing and ad revenue, which is evidence that its AI-powered products (e.g., Gemini) are becoming an integrated part of the company’s ecosystem. That means that AI is enhancing search instead of threatening its existence.

GOOGL stock formed a golden cross shortly before the company’s earnings report. Adding to the bullish narrative, the stock trades at a forward P/E of around 21x, making it one of the more attractive technology stocks.

The company has over $100 billion in cash, which adds to the fundamental case.

The stock is trading within about 7.8% of its consensus price target of $211.39. However, analysts have been raising their price targets an average of 7% since the earnings report, which adds more strength to the belief that the golden cross is just the beginning.

This Fast-Growing Tech Stock Is Riding the Cloud and AI Boom

Datadog Inc. (NASDAQ: DDOG) is a leading provider of observability tools for cloud infrastructure. Specifically, the company is a leader in log management and observability software.

Its platform functions as a “digital control room” for all the apps, websites, and servers in use.

DDOG stock appears to be riding a wave that’s been present for many software stocks.

The stock completed a golden cross in late July after a consolidation. One reason for the bullish sentiment is Datadog’s inclusion in the S&P 500, which will bring in institutional dollars.

Datadog stock may receive a boost from its upcoming earnings on August 6. The company reported 25% year-over-year (YOY) revenue growth in the last quarter based on strong customer retention.

As of July 30, DDOG stock is trading above its consensus price target. Barclays just raised its price target to $170. Investors could see more of the same, both before and after earnings.

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Big Beat, Bigger Plans: AEP Stock Powers Up on Data Center Boom

Written by Chris Markoch

Shares of American Electric Power Co., Inc. (NASDAQ: AEP) are up more than 3% on July 30 after the company delivered a double beat in its second quarter earnings report. That pushes the stock’s year-to-date gain over 21%. That’s significantly better than the Utilities Select Sector SPDR Fund (NYSEARCA: XLU), which is up 12.6% in 2025.

AEP reported earnings per share (EPS) of $1.43, which easily beat analysts’ expectations for $1.27 and was 14% higher year over year (YOY). The company also affirmed its full-year earnings guidance and predicted it would fall in the upper half of a range between $5.75 and $5.95.

On the revenue front, the company recorded $5.06 billion, beating estimates for $4.85 billion. That number was also 10% higher YOY.

This rate of growth makes AEP one of the best-performing utilities stocks. However, in stock price growth alone, the company is exceeding its average total return over the last five and 10-year periods.

That’s significant because AEP is known as a quality high-yield dividend stock that currently offers a yield of 3.28%. The company has increased its dividend for 15 consecutive years and will likely extend that streak later this year.

Growth Is Being Driven by Data Center Demand

The highlight of the report was the company’s strong customer load growth. AEP announced it had secured agreements for 24 gigawatts of new load by 2030. That was up from the 21 gigawatts the company had previously announced. Analysts expect that this growth will push the company’s peak load beyond 60 gigawatts.

That will make it one of the fastest-growing utilities in the sector.

On the earnings call, President and Chief Executive Officer (CEO) Bill Furman noted that these new agreements were driven primarily by a combination of data centers, reshoring, and manufacturing. Furman quickly emphasized that these are signed customer agreements that protect the company from changes in usage-driven volatility.

The growth story may have much further to go. American Electric Power has a wide service area that is attractive to data centers. A large part of the company’s footprint is in Ohio, which, according to the company, “has become a recognized hub for data centers.”

AEP has the largest transmission system in the country with ample fiber capacity and a reliable supply of water. All of this makes the company an attractive partner for companies looking to build data centers.

The company has also had several regulatory wins that have strengthened and lengthened current tariff provisions. These provide financial protection for the company as they make investments to handle these larger loads.

Should Rising Capital Spending Concern Investors?

Of course, this new power load comes with a cost. In the earnings report, the company announced a new five-year capital plan that will total approximately $70 billion, an increase from its current $54 billion plan.

The increased spending isn’t unusual. AEP is executing a strategic plan that emphasizes integrating renewable energy technologies, which has increased the company’s long-term debt to around $45 billion. The new capital plan includes the possibility of small nuclear reactors (SMRs) among other solutions.

That means the company’s debt-to-equity ratio of 1.42 is likely to move higher. However, AEP’s rock-solid business model, which generates about 90% of its revenue from fully regulated operations, will provide the reliable revenue and steady earnings to support growth, pay down the debt, and still add shareholder value.

Should You Buy AEP Stock?

AEP stock is up over 21% in 2025, which, as mentioned above, puts the stock above its historical averages. Investors should consider whether this year is an outlier or the beginning of a multi-year trend.

The AEP analyst forecasts on MarketBeat give the stock a consensus Hold with a price target of $108.31, 4.5% below its current stock price.

The stock is also trading at a slight premium to its historical averages based on price-to-earnings (P/E) and price-to-sales (P/S) ratios.

That means those investors looking to start a position in AEP stock may want to wait for a pullback.

However, the probability of increased revenue in the coming years, combined with the company’s reliable dividend, makes the stock a Hold for current investors.

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Why Byrna Could Be the Top Defense Stock to Watch Now

Written by Nathan Reiff

2025 has been a remarkable year for the defense industry. Look no further than a benchmark exchange-traded fund (ETF) like the Global X Defense Tech ETF (NYSEARCA: SHLD), which has returned about 65% year-to-date (YTD).

While a surge in defense stocks may be suitable for investors, it often comes at the price of geopolitical stability, and ongoing tensions between the United States, Russia, China, and other major players are likely a significant contributing factor in the industry’s rally this year.

Byrna Technologies Inc. (NASDAQ: BYRN) is not a stock appearing in SHLD’s basket or the portfolio of many different defense-focused ETFs. However, this small-cap name with a market cap of $513 million has some of the industry’s most adamant analyst support.

Plus, given BYRN’s 20% share price decline YTD, investors may have a unique opportunity to buy at a relatively low price.

Broad Appeal and Growing Retail Access

Byrna’s products, including handheld personal security devices, shoulder-fired launchers not requiring firearm licenses, and self-defense aerosol products, among other items, have a broad appeal to both law enforcement customers and private individuals looking for innovative ways to protect themselves.

A key factor in Byrna’s appeal is its use of so-called “less-lethal” products, an alternative to traditional self-defense tools. One can look at two recent sales for evidence of growing demand for Byrna products. First, there’s Byrna’s July 4th holiday promotion, in which web sales surged 18% year-over-year (YOY).

Second, Amazon.com Inc.’s (NASDAQ: AMZN) popular Prime Day event generated sales of Byrna products 28% higher than they were a year ago.

Byrna is adept at maneuvering to meet this higher demand level. As of late July 2025, the company’s products were available in nearly 300 brick-and-mortar retail locations, an increase of almost three-quarters compared to one year prior. Despite the substantial growth in retail footprint, this is likely only a midpoint, as Byrna plans to expand its offerings to about 500 retail locations by the end of the company’s fiscal third quarter in August and 800 by late November.

The company believes its products speak for themselves. The partnership with big-box retailers will allow potential customers to experience holding or even testing the products, which is key given what Byrna executives call a 60% conversion ratio among potential customers testing its launcher product.

Demand Yields Earnings Results

The firm’s second-quarter earnings results, released on July 10, show that the climbing interest in its products has already translated into tangible financial benefits. For that period, which ended May 31 and thus did not include either of the sales events above, Byrna reported 41% YOY revenue growth and 22% YOY earnings per share (EPS) improvement, each beating analyst predictions.

As a rapidly growing company, investors will expect Byrna to expand its product line-up and visibility while increasing its brand. This has indeed been the case, with the firm depleting its supply of cash and marketable securities to $13 million from nearly $26 million in recent months.

However, the company is debt-free, which gives it substantial breathing room as it continues its aggressive expansion project. If Byrna can improve its gross margin, which has plateaued at 62%, it may be able to further increase its cash reserves.

Watch for Recurring Revenue, Potential for Customer Softness

Investors should consider two other factors that may impact Byrna’s future performance. First, the company plans to build up its recurring revenue streams through SaaS-type development services and an insurance policy designed on a recurring payment system.

These could help Byrna make its customer base more sticky, which is essential given that most customers are unlikely to purchase expensive self-defense products repeatedly.

On the other hand, the cost of these products could also be a downside for Byrna. In its most recent earnings call, company executives pointed to cart abandonment rates for customers shopping online, suggesting that some customers may face sticker shock when they see the prices of Byrna’s products. Particularly given that a host of external factors dampen consumer spending, this could prove problematic for Byrna.

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