The third quarter is about to kick off after strong first half for stocks, with Deutsche Bank seeing strong performances ahead for a select group of names. Analysts at the bank highlighted their top stock ideas for the third quarter, picking 41 names across five sectors ranging from artificial intelligence to healthcare and industrials. Deutsche’s “Fresh Money” list gets refreshed every quarter, capturing the bank’s top investment ideas for the next 12 months. The list has outperformed the broader market with a 387% return since its inception in the third quarter of 2017, while the S & P 500 is up 351% in that time. Here are some of the names that made the list: Software giant Oracle made the cut. “We believe Oracle is poised for significant growth, driven by its leadership in AI cloud infrastructure and the continued, underappreciated strength of its core cloud, apps, and database businesses,” wrote analyst Brad Zelnick. Last week, Oracle stock recorded its worst week since 2001, falling 19% as AI financing concerns escalated. Still, Zelnick thinks the stock is set to outperform on three key drivers: it will continue to be one of the leaders in AI infrastructure, its non-AI revenues are growing rapidly and taking share from larger service providers. The firm has a buy rating on the company with a $300 price target, signaling upside of 103%. ORCL YTD mountain ORCL year to date Another stock that grabbed the bank’s attention was Starbucks . The firm is viewed as one of the highest quality global restaurant companies and analyst Lauren Silberman sees a significant potential upside to medium and long-term numbers. “We think SBUX is making the right investments for the business and is on the path back to sustainably positive SSS and historical margin levels by refocusing on the customer experience and improving its cost infrastructure,” wrote Silberman. The stock was rated a buy with a $120 price target, which implies upside of 15.3% from Monday’s close. Starbucks is moving toward an inflection point, the analyst noted, by refocusing on customer experience, reworking its loyalty program, cutting down its costs and frequent product innovation . Last year, the coffee giant launched protein-packed cold foam and lattes to its menu for customers who want to add more protein to their diets. Silberman said the company was improving its cost infrastructure, pointing to its store closures and reduction in corporate workforce as ways to unlock margins. Another pick on the bank’s list was AppLovin , which analyst Benjamin Black described as “one of the more unique scaled Internet assets.” “APP offers a compelling opportunity as a unique, scaled Internet asset, propelled by accelerating gaming, emerging consumer advertising, and compounding AI-driven model improvements,” wrote Black. The stock with a buy rating held a price target of $660 per share, implying a gain of 32% from Monday’s close. Black said the Palo Alto-based technology company has incremental growth opportunities across both its core gaming business and the emerging consumer advertising segment. Other stocks on the list include: Ralph Lauren, Humana, Wyndham Hotels and American International Group.
These are Deutsche Bank’s top picks as Q3 kicks off
