JPMorgan Identifies Two High-Conviction ‘Strong Buy’ Stocks for Late 2026

U.S. equity markets have maintained solid momentum throughout 2026. According to JPMorgan global investment strategist Kriti Gupta, the S&P 500 has the potential to reach 9,000 by mid-2027, which would represent an approximate 20% gain from current levels.

To capitalize on this optimistic outlook, JPMorgan analysts have highlighted two specific “Strong Buy” recommendations for the remainder of 2026: Broadcom (AVGO) and NetEase (NTES). While these companies operate in vastly different sectors—one a trillion-dollar semiconductor giant fueling the AI infrastructure boom and the other a Chinese gaming powerhouse navigating structural exchange shifts—JPMorgan believes both possess significant upside potential.

Broadcom: AI Backlog Projected to Surpass $150 Billion

JPMorgan analyst Harlan Sur has reiterated an Overweight rating on Broadcom with a price target of $580. Based on TipRanks data, this target suggests a potential increase of approximately 56% from its recent price of around $372. Sur’s bullish thesis is primarily centered on the company’s growing backlog of booked but undelivered orders.

Sur anticipates that Broadcom’s backlog will rise to $150 billion by 2027, up from $120 billion, driven by expanding partnerships with AI leaders including Google, Meta, and Anthropic.

Broadcom’s financial reports support this optimism, showing record-breaking growth. The company’s Q2 revenue surged 48% to $22.19 billion, while cash from operations grew 60% to approximately $10.5 billion year-over-year. Free cash flow for the period also reached $10.26 billion.

Despite these gains, the stock experienced a decline of over 16% in June after management maintained its AI revenue outlook rather than raising it. Additionally, some insider selling has occurred, with co-founder Henry Samueli selling over $651 million in shares over the last quarter, though the stock maintains its positive rating.

NetEase: Gaming Growth and Strategic Hong Kong Listing

JPMorgan analyst Daniel Chen maintains an Overweight rating on NetEase with a price target of $185, roughly 47% above its current valuation. Chen argues that the stock is undervalued, trading at 12 times expected 2026 earnings, with operating profits projected to grow by 19% in 2027.

Financial performance has remained steady; NetEase’s first-quarter revenue rose 6.1% to $4.43 billion, beating market estimates. The company has also extended its $5 billion stock buyback program through January 2029.

Much of Chen’s optimism stems from the upcoming launch of “Sea of Remnants” in July or August. The new title is expected to accelerate game revenue growth from 8% in the second quarter to 11% in the third and 16% in the fourth quarter.

Strategically, NetEase completed a transition to a dual primary listing on the Hong Kong Stock Exchange on June 30, 2026. This move makes the company eligible for “Stock Connect,” the system allowing mainland Chinese investors to purchase Hong Kong-listed shares. Goldman Sachs anticipates the company will be officially added to Stock Connect around September.

Analyzing Two Divergent Investment Narratives

These two picks offer very different risk-reward profiles. Broadcom has already seen a massive rally driven by AI enthusiasm, meaning it must meet high expectations to continue its ascent. In contrast, NetEase is priced more conservatively, with its growth tied to a new product launch and technical listing advantages rather than AI hype.

Key Success Factors

• Broadcom: Must successfully convert its AI backlog into high-margin shipped revenue. The ramp-up of custom chip deals with Google (extending to 2031) and Meta (extending to 2029) must stay on schedule.
• NetEase: The “Sea of Remnants” launch must be successful to meet quarterly growth targets, and the company must achieve full Stock Connect inclusion to unlock mainland Chinese capital.

While JPMorgan is bullish, the broader Wall Street consensus is more conservative, with average price targets of $513.58 for Broadcom and $155.33 for NetEase.

Potential Risks and Headwinds

Valuation is the primary concern for Broadcom. Because the stock is priced for near-perfection, any execution errors could lead to a sharp correction. While executive insider selling is common, it remains a metric for investors to monitor.

NetEase faces regulatory risks, as Chinese authorities could delay approvals for new game titles. Furthermore, the timing of the Stock Connect listing is subject to exchange officials and may not align with analyst predictions.

For investors, the key metrics to watch are whether Broadcom’s production can keep pace with AI demand and whether NetEase’s listing transition successfully increases trading volume from mainland China.

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