The World Cup may be over, but investors aren't getting much of a break from the action. While Spanish fans are celebrating their team's championship victory, Wall Street is still playing through extra time, with markets swinging between optimism and caution.
After a strong run, stocks have entered a more volatile phase as investors navigate geopolitical conflicts, renewed inflation concerns, higher oil prices, shifting interest-rate expectations, and bouts of profit-taking. Even the AI trade, one of the market's biggest winners over the past two years, has cooled as investors reassess valuations and the pace of future infrastructure spending.
Yet, beneath the day-to-day headlines, the broader picture remains constructive. As second-quarter earnings season kicks off, FactSet estimates S&P 500 companies will deliver 23.3% year-over-year earnings growth, marking a second consecutive quarter of growth above 20%.
Promotion
55% Off TipRanks
-
Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions
-
Subscribe to TipRanks Smart Investor Newsletter , and discover new investing opportunities with data-backed stock picks
Learn more about TipRanks Premium
That constructive outlook is shared by Chris Hyzy, chief investment officer for Merrill and Bank of America Private Bank, who wrote, "While it feels like a disconnect, markets aren't ignoring bad news. Instead, sound economic fundamentals are enabling markets to see past today's turbulence to potentially transformative growth ahead… We see periodic weakness as a potential buying opportunity as markets focus on long-term growth themes such as AI innovation, infrastructure replacement and re-industrialization."
Bank of America analyst Ross Fowler is taking the logical next step by looking for stocks that offer compelling buying opportunities. Fowler zeroed in on two, both of which feature recent share price pullbacks, Buy ratings, and sound upside potential. TipRanks data shows that both also earn Strong Buy ratings on Wall Street, so let's take a closer look and see what's driving the enthusiasm across the board.
Fervo Energy Company ( FRVO )
We'll start in the energy sector, where demand for carbon-free power continues to grow. The world's energy industry, especially in the West, is shifting toward cleaner energy, and Fervo is pioneering a new approach.
The company develops geothermal power projects, an old concept, but is applying new technologies to the field. Fervo is using advances in drilling technology developed over the past decade in the oil and gas industry, to improve the performance and efficiency of geothermal well designs. The company is applying techniques such as horizontal drilling to reach geothermal reservoirs and create multiple wells from single locations. In addition, the company is making use of fiber optic cable technology, sending fiber optics into the wells to gain real-time data on flow, temperature, and performance that would be difficult or impossible to learn from the surface.
The upshot here is that Fervo is able to increase the efficiency of geothermal power systems. The basic technique remains the same – to circulate water through hot underground rock formations, where it absorbs heat before being brought to the surface to generate electricity. The use of newer drilling and data retrieval technologies allows the company to reap efficiencies in everything from reliability to land use to cost.
Fervo has had a number of important headlines in recent months. In June, the company announced an agreement with the Pacific Northwest National Laboratory (PNNL) to develop a new geothermal platform, the next generation of the tech, based on Enhanced Geothermal Systems (EGS) technology and dubbed the EGS-Twin. As part of the agreement, the companies will use Fervo's field data and expertise to train AI models using Nvidia's AI computing platform. Fervo states that the operation aims to "optimize power generation and strengthen the scalability of enhanced geothermal systems."
Fervo went public earlier this year, beginning trading on May 13 after selling 70 million shares at $27 each and raising $1.89 billion in gross proceeds. Despite the strong IPO, the stock is now down 33% from its first day closing price as investors weigh a deep quarterly net loss and projected capital expenditures of $1.2 billion going forward.
In the 1Q26 financial report, released in June, Fervo's top line came to $61,000 and missed expectations by over $600,000. The company reported a net loss of $31.8 million, much deeper than the $9.1 million net loss seen in the first quarter of 2025. The results reflected the company's early stage of commercialization and continued heavy investment in expanding its geothermal platform.
For Bank of America analyst Ross Fowler, who is ranked among the top 10% of Wall Street analysts by TipRanks, the recent pullback has made the stock even more compelling.
"Our fundamental outlook and probability-weighted SOTP methodology are largely unchanged, but the shares now offer compelling upside to our PO. The recent Sawtooth 7 drilling result strengthens our conviction in Fervo's learning-curve thesis: the company completed a longer, deeper, hotter and larger-diameter Phase II well in 21 days, matching its prior Cape Phase I record. With 658 MW of binding PPAs, a $7.2B backlog, a 3 GW Google framework and Cape Station under construction, we believe the current valuation provides a particularly attractive buying opportunity," Fowler opined.
An "attractive buying opportunity" leads naturally to a Buy rating from the analyst, and his price target, at $36, suggests a one-year upside potential of 46%. (To watch Fowler's track record, click here )
Wall Street is even more bullish. Fervo earns a Strong Buy consensus rating based on 11 analyst reviews, including 10 Buys and just one Hold. With shares trading at $24.65, the average price target of $46 points to about 87% upside over the next 12 months. (See FRVO stock forecast )
ERock ( EROC )
Data centers need enormous amounts of dependable electricity, and the existing power grid often cannot deliver it fast enough. ERock designs, installs, operates, and maintains onsite power systems for customers that cannot afford to spend years waiting for new grid capacity. Its potential customer base extends beyond data centers to utilities, manufacturers, healthcare providers, retailers, logistics operators, and other businesses that require reliable electricity.
The company's main product is the RockBlock, a modular generator system powered by natural gas supplied through underground pipelines. Each RockBlock can be configured to provide between 1.5 and 3.5 megawatts of electricity, with additional units added as a customer's power requirements grow. ERock says the systems can operate continuously at their designed capacity with 99.999% reliability, while occupying about half the space of comparable natural-gas units and producing less noise and fewer emissions than many conventional alternatives.
ERock pairs that hardware with Granite, its proprietary software platform. Granite gathers operating data from the company's equipment in real time, allowing ERock to monitor systems remotely, detect potential problems, adjust maintenance schedules, and optimize power output. ERock also provides installation, operations, maintenance, asset management, replacement parts, and equipment upgrades, creating the possibility of recurring revenue long after the initial system has been delivered.
Speed is one of the company's main selling points. ERock says it has connected power systems exceeding 50 megawatts within 12 to 18 months of signing a contract, compared with deployment timelines that can extend several years for traditional power-generation and grid-expansion projects. This "bridge power" model allows data centers and other large facilities to begin operating while waiting for a full utility connection. After that connection is completed, the ERock equipment can remain onsite as backup power or provide additional electricity during periods of high demand.
The demand story is compelling, particularly as AI infrastructure places heavier loads on already-constrained electricity networks. ERock's contracted power-system sales backlog reached about $1.28 billion at the end of March, nearly nine times its level one year earlier, with management indicating that about $1.1 billion was related to AI data center projects. The company had 1,059 megawatts of operational capacity installed at that point, while one of its largest disclosed projects involves providing 366 megawatts of onsite power for Meta's planned data center in El Paso.
ERock made its stock-market debut on June 10, selling 27,906,977 shares at $21.50 each, while generating about $600 million in gross proceeds. However, the shares have since fallen 42% below its first-day closing price.
Valuation appears to be one of the main concerns. At its IPO price, ERock was valued at $5.9 billion despite generating only $183.1 million in revenue during 2025. That revenue represented solid growth from $128.5 million in 2024, but the company still posted a $59 million annual net loss and an adjusted EBITDA loss of $22.6 million. The losses continued into the first quarter, when ERock generated $31.7 million in revenue but reported a net loss of $17.2 million.
The selloff also reflects the execution risks surrounding that growth. ERock must convert its large backlog into completed projects without running into permitting, installation, supply-chain, natural-gas connection, or utility-interconnection delays. Its business is concentrated as well: three customers generated 48% of 2025 revenue, while Texas accounted for 80%. In addition, much of the IPO's net proceeds was designated for purchasing units from existing owners and making payments connected with the company's reorganization, rather than flowing directly into expansion.
That selloff is also what led Bank of America's Ross Fowler to turn bullish on ERock, upgrading the stock from Neutral to Buy while setting a $16 price target. If Fowler's forecast proves correct, the shares could climb 48% from current levels over the next 12 months.
"At initiation, we viewed ERock as a differentiated beneficiary of accelerating AI-driven electricity demand, constrained grid infrastructure, and the growing need for rapidly deployable generation capacity. We continue to hold that view today. What has changed is that investors can now access that opportunity at a substantially lower valuation while many of the same growth drivers remain visible… We like the backlog, 12-18 month deployment cycle, 95%+ services attachment and capital-light model, and despite risks (execution, permitting, customer concentration, competition, regulation, and suppliers), at today's price, we believe upside now better compensates investors for those risks," Fowler explained.
The broader analyst community sees even greater upside than Fowler does. ERock has earned a Strong Buy consensus rating based on 8 Buy recommendations, and the average price target of $22.63 implies a 109% upside from the current share price of $10.81. (See EROC stock forecast )
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
