5 Best Stocks to BUY in October

September is officially behind us. And if you've been watching this channel for at least the past month, you know I've been warning investors about two things. Number one, September is historically the worst month of the year. And number two, I don't think investors should panic every time the market started to price in another Fed rate hike. Well, September is over and the probability of an October rate hike has collapsed as I predicted and we're now entering a much better stretch for stocks. In fact, it's the best quarter of the year. So today we're going to look at what just happened in September, why October has historically been known as a bear killer, and what the latest economic data tells us about the Fed. And then I'm going to be giving you five stocks I'm looking to buy in the month of October. And stock number five has the ability to be a big-time winner. This is an interesting list. We've got AI stocks, e-commerce stocks, healthcare names, industrial, and that fifth one is a high-risk, highreward AI stock that I like a ton right now. So, before we jump into it, be sure you show your appreciation by simply smashing that like button down below. It really helps the channel a ton. And also, be sure to keep up with all of my trades, both stocks and options, by joining my private investing community, the Stock Investors Edge. Check out the pin comment down below. With that being said, let's jump right into it, starting with the good news. September is over. Historically, that's something investors should probably be pretty happy about. The data you could see here in front of you dating back to 1945 shows the S&P 500 has averaged approximately minus.6% during the month of September. That's the worst average performance of any month. But here's where it's interesting. The S&P 500 itself held up relatively well during the month of September. As you can see, the S&P 500 finished roughly flat, gaining.3% during the month, while the Nasdaq actually gained around 2%. The Dow Jones on the other hand was pretty bad, down 4.3% during the month of September with stocks like Goldman Sachs, Amgen, and McDonald's really weighing on the stock. All down roughly 10% during the past month, putting a ton of pressure on that index. But on top of all that, September was significantly worse for small caps. As you can see, the Russell 2000 fell 5.3%. So, if you own the likes of Nvidia, Microsoft, Meta, and some of these larger AI names, September probably didn't feel all that bad to you. But the average stock had a much more difficult month. And that is the distinction that I think is really important. This was a market being held together by AI Mega Cap Technology. Nearly 80% of S&P 500 stocks actually declined during the month according to Wall Street Journal's analysis. That is an incredible divergence. But now we move on to October. We're going to turn the page. And October has fascinating reputation. If you've ever looked at the stock traders almanac, which I highly recommend, there's actually a term for it. It's called October phobia. Why? Because investors remember some absolutely brutal market events occurring during October in the years of 1929 through 1931. October itself hasn't actually been a bad month, but it has been a volatile month. Jumping back to our monthly performance chart, we could see that the S&P 500 has a monthly return of.9% during the month of October. It's the start of the best quarter of the entire year. But here's another fascinating angle to view October. We are in the midst of midterms and during those years, October performance is considerably higher. Actually, the best month of the entire year. So, there are plenty of reasons to look at this seasonality and get excited. But don't just look at October and say October is here, stocks are automatically going higher. Seasonality doesn't work that way. But I do look at it and say one historical headwind just disappeared. That was the month of September. And there's another potential headwind that has changed dramatically over the past week. That was the Fed. This is something I've been pretty consistent about on this channel. When markets started aggressively pricing in another October rate hike, I told you don't overreact because I don't think the Fed needed to immediately raise rates again in the month of October. And look at where we are now. The current Fed watch has no change at nearly 80% with a 25 basis point hike now all the way down to roughly 20%. So the market has moved substantially toward the position we've been discussing on this channel, no October rate hike. And why did that happen? Because the data this week changed the conversation. This is so typical for investors to overreact. We were just at 65% chance at an October rate hike and now all of a sudden things flip like that. Hence why many investors can't outperform the greater market because they let emotions creep in too easily. Now let's run through some of the economic data that we got in the past week. Beginning with the Jolts report that showed job openings coming in around 7 million. Wall Street was looking for 7.2 million. So slightly below there. And July was revised higher to 7.3 million. So that was a positive. That isn't collapsing labor market, but it's also not a labor market screaming for another immediate rate hike. We will revisit jobs here in a minute, but let's transition first to the Fed's preferred inflation gauge, which was PCE. And headline PCE came in at 3.4% year-over-year. But more importantly, core PCE, which is what I put more weight into, came in at 3% flat. And critically, the inflation reading was cooler than markets expected, which helped reduce expectations for another immediate Fed hike. Now, 3% inflation is not mission accomplished for the Fed. We're still well below their target of 2%. So, I'm not telling you inflation is dead. I'm saying the Fed has less urgency to raise rates again immediately. That's a big difference, especially if things continue to cool. Next, we got ISM manufacturing, and that came in with a reading of 54.5. Remember, anything above 50 represents expansion. Below 50 equates to contraction. So, we want to see numbers above 50. So, with a score of 54.5, manufacturing remains healthy. But buried inside that report was a fascinating number, one that the Fed is probably paying very close attention to. Prices paid that came in at 77.9. That jumped 6.8 points and that reached its highest level since May. ISM specifically pointed to higher costs associated with things like energy, geopolitical disruptions, and tariffs. That basically is the economy telling us growth is okay, but inflation risk isn't gone. And that's exactly why I don't think the Fed can declare victory right now. Next on the docket was another check on jobs with our weekly jobless claims. Initial unemployment claims came in at 197,000, down slightly from the previous week and below roughly 200,000 expected. Again, not a recessionary number as the data continues to tell us that the job market's okay. Not great, not recessionary. But then Friday was the big one when we got the jobs report. The US economy added just 29,000 jobs in the month of September. The unemployment rate, it increased to 4.2%. And the prior two months were revised down by a combined 60,000 jobs. And this right here is why you watch the investors weekly playbook and you're part of my community because last week I mentioned that a cooler report would bode well for the markets. That's what we saw on Friday. And this jobs report is probably the single biggest reason the October hike probability collapsed because now the Fed has an interesting problem. Inflation is still elevated. Manufacturing prices are on the rise, but labor is cooling a bit. So why rush another rate hike 4 weeks after the last one? That's been my argument and stance the entire time. But here's where things get more interesting. the market has basically moved towards an October hold, but December is still pricing in one additional hike. And then if we look out to 2027, we're pricing in an additional two hikes. And that's where I'm still more skeptical. I'm not saying it's impossible. If inflation reacelerates or oil stays high, the economy continues running hot and wages remain sticky, the Fed may need to keep tightening. But I'm not convinced the economy absorbs multiple additional hikes without growth eventually slowing enough to change the Fed's direction. And that's why this is going to be important over the next few months. The key is I'm willing to change my view as the data changes. I'm not trying to predict the Fed's move 6 months in advance. I'm trying to determine whether the market's expectations are moving ahead of the actual economic evidence. And fortunately, after this monster week of data, next week's economic calendar is considerably lighter. The two reports I'm going to be watching most are going to be ISM services PMI and the consumer sentiment report. Services matter because after all, the US economy is twothird services. And I'll especially be watching the prices component because the manufacturing data just showed us that pricing is already at 77.9. I want to know whether we're seeing the same inflation pressure spread across services. Consumer sentiment will also tell us how households are responding to higher rates, higher energy prices, and persistent inflation. But compared with this week, next week is going to be much easier, allowing you to concentrate more on stocks. Which brings me to the main event. five of the best stocks to consider buying in the month of October. These aren't five random stocks. Each one gives me a very different opportunity. And we're going to start with a company that just received two enormous pieces of confirmation from the AI industry. And stock number one is going to be Broadcom stock ticker AVGO. If you watch the Nvidia and Micron earnings, and I just covered Micron in my Thursday video last week, so if you haven't yet seen that, give that a view after this one. But with both of them and Nvidia, I think you received two more confirmations, two of the biggest that the AI infrastructure cycle remains alive and well. Nvidia confirmed enormous demand for AI compute. Micron confirmed enormous demand for memory and it's not slowing. And sitting between those layers is another company I continue to love, Broadcom. In the company's latest earnings report, they reported 29.6 billion of revenue just during that particular quarter. that was up 86% and they generated 13.7 billion of free cash flow and guided the current quarter to approximately 34.8 billion of revenue. But the reason I like Broadcom isn't simply because Nvidia and Micron did well. It's because the AI infrastructure remains fully intact. Something I discussed right after the CEOs of the largest AI platforms came out with some fear-mongering and I called their bluff. And with the AI infrastructure buildout, it requires things like compute, memory, networking, custom silicon. And Broadcom has exposure to two of the most important layers, networking and custom AI accelerators. That's what makes Broadcom different. And if we jump over to my Edge website, which is available to all members of my private investing community, again, you can check out that pin comment down below. We can look at Broadcom stock ticker AVGO. And the first thing we see is the stock chart and the edge score, which I love to look at because it's scoring the company based on a number of different factors, valuation, future growth, financial health, and past performance. And if the company pays a dividend, a score above 70 is solid, and Broadcom is sitting at 79. Next, we can check out the discounted cash flow page, which you have the ability to toggle and change assumptions on your own, but the default has the stock having a current fair value of more than 10% higher than today's stock price. Then we can go where analysts think the stock is going on the forecast tab where analysts have an average 12-month price target of nearly $510 per share suggesting more than 40% upside from current levels. And I'm with them. I believe this is a $500 stock in the next 12 months. No doubt. Now, let's move on to stock number two, which is going to be Marcato Libre, stock ticker Mi. And this might be one of my favorite setups on the entire list because Marcato Libre has pulled back substantially. But the business has not suddenly stopped growing. The latest quarter revenue and financial income reached 10.2 billion, up 50% year-over-year. And this marked Marcato Libresy's 30th consecutive quarter of growth above 30%. Think about that. Not three quarters, not 10, 30. Unique active buyers grew 26%. Marcato Pago monthly active users increased 30%. assets under management nearly 70% growth. Advertising above 70%. And total payment volume exceeded 100 billion for the first time. Yet, when we revisit the Edge site, we can see shares of Melly are down 15% on the year, but they sport an edge score of 82. And that's what we like to see. Heading over to the earnings tab inside of our Edge analysis site, we can see that analysts are looking for the company to generate $55.79 per share in 2027, giving the stock a forward PE of 30.4. That's where things become interesting. 30X might seem a little expensive. That's not cheap, Mark, but valuation without growth tells us very little. For a business that's still growing its earnings around 50%, that gives the stock a PEG ratio of just 0.6, which is very intriguing. And this is a name I've purchased twice so far in 2026. As you could see the trade alerts from my community on your screen right now. Both are green on the year. But I just might be buying here again. And remember to join my private investing community and get those trade alerts. Check out the link below. Remember, the goal with investing is not to time the exact moment the stock starts its run. No one can do that. The goal is to understand how to properly analyze stocks so that you can have confidence that you're buying a highquality company at a great value. And with Melly, you get exposure to things like e-commerce, payments credit advertising logistics, and one of the world's most underpenetrated digital economies. I'm becoming much more interested after its latest pullback. My look for October is I'm using this weakness to accumulate a world-class compounder at a much more reasonable growth adjusted valuation. And with that, let's move on to stock number three, which is going to be United Health, stock ticker UNH. This one is completely different. United Health has been through a nightmare. healthcare utilization, Medicare advantage pressures, government scrutiny, fraud concerns, leadership issues, negative headline after negative headline. But this is where investing gets interesting because eventually we have to separate headline risk from earnings power. And United Health's latest quarter showed signs of stabilization. Revenue reached 112 billion, operating earnings 8 billion, adjusted EPS of $6.38, and management actually increased their fullear adjusted EPS guidance to $19.75 per share. That's important. There are still meaningful regulatory reimbursement and industry risks that are out there. In fact, new policy changes around Medicare Advantage and ACA enrollment remain live issues, and the next major test is coming quickly. United reports its Q3 earnings on October 13th, so we'll be paying close attention to that. Over the past 12 months, I told you it's been a whirlwind. The stock is up all of 3%. But it's traded as low as in the 250s and as high as in the 460s, and the stock currently sports an edge score of 73. Shares traded a forward P of 17 1.5 times, which is below their 5-year average of 19.7 times. analysts. They're also upbeat on the stock, giving it an average 12-month price target of nearly $475 per share, implying more than 25% upside. And the lowest price target on the street is where the stock trades at currently. So, I like that setup. For those of you that are in the technicals, we are sitting right above the 200 day moving average, which could provide an area of support for the stock as well. So, from an October perspective, I'm interested in the combination of recovering earnings, a depressed valuation relative to historical levels, and improving expectations. But the turnaround still needs confirmation, which we'll be watching closely here in a few weeks. And that leads us to stock number four, which is going to be Uber. I've talked about this one several times recently because I think the market continues to misunderstand Uber's position in autonomous driving. Anytime we get news on robo taxis, Uber shares get hit. They fall for a while, then they recover nicely. Then we get more news on robo taxis. They come back out, Uber shares fall. It's been a revolving cycle and a great one for investors when you understand that cycle. The bare argument for Uber is robo taxis eliminate Uber. My question is, well, why is that? Uber doesn't necessarily need to build the world's best autonomous driving software. It needs riders and vehicles. That's the marketplace. And now Uber is going even further. Uber has partnered with the likes of Lucid and Nurero on a robo taxi fleet built specifically for the Uber platform. Uber has licensed Nuro's autonomous driving system and Uber and its fleet partners will actually own and operate the vehicles. Even more importantly, Uber expanded its commitment to at least 35,000 Lucid Robo taxis. Testing is already underway with the San Francisco Bay area expected to be the first to launch to market and Houston planned for 2027. They've also partnered with a number of other car manufacturers like Rivian and even partnering with the likes of Nvidia, targeting a fleet of a 100,000 autonomous vehicles across 28 cities by 2028. That's why I think this idea that autonomous driving automatically destroys Uber is too simplistic. Uber can potentially become both the marketplace where third party autonomous fleets find riders and an operator owner of autonomous fleets itself. That's a dramatically different thesis. Another perceived threat to Uber right now is the recent launch of Meta's new AI agent, Muse. It would be foolish to glance over this as a nothing burger, but I don't think the impact is as big as some think. With transportation, it's not like e-commerce where someone is just looking to buy a certain product and they want the best price. With transportation, like Uber, they are looking for a ride and they need it quickly in a certain amount of time. So, who has the largest fleet by a wide mile? It's Uber. So, I also see this as a benefit. But jumping back to our Edge site, we can see that shares of Uber are down 16% on the year and currently sport an edge score of 73, which is solid. For this one though, let's also run the DCF on them. And assuming a just 11% cash flow growth over the next 5 years per year, that gives us an implied fair value of $82, which is 21% above today's actual price. And when we look at analysts, they are still upbeat on the name as they have an average 12-month price target of nearly $105 per share, implying over 50% upside. But for me, looking out through the end of the year, I expect this to be a stock that's back in the range of around $80 by year's end. We'll have to see. So for October, sure, the stock could get a bounce, but this is a longer term play for me. I believe the market is still underestimating Uber's ability to turn autonomous vehicles from a threat into a platform opportunity. And now we move to the stock that potentially has the biggest upside of all of them. Stock number five is going to be Lum stock ticker LI TE. Big upside though comes with risks. This is easily the highest risk stock on the list. If Nvidia is building the compute and Micron is feeding the compute memory, Lumenum is attacking another AI bottleneck, moving data. Lumenum makes optical and photonic technologies used to move enormous amounts of data through AI infrastructure. And as AI clusters continue to grow, copper can't solve every connection. At longer distances and higher bandwidth requirements, you increasingly need optics. And this is a reason I like companies like Marll and Credo, who we've talked about on this channel. For Lmentum, though, in their latest quarter, they generated $1 billion of revenue. But look at management's guidance for next quarter between 1.22 billion and 1.275 billion. Non-GAAP operating margin 40%. adjusted EPS between $45 to $4.35. Management specifically highlighted growing adoption of 1.6 trillion optical modules and optical circuit switching. And this market could become enormous. City recently estimated the optical circuit switching market could reach approximately 11 billion by the year 2030. And with Lum and Coherent positioned as major suppliers, that's why light or Lumenum makes the list. But I'm putting a giant asterk next to it. The stock has had an enormous run. Jumping over to the Edge site, you can see the stock is up a staggering 560% just in the past 12 months and sitting at a new all-time high. And they have an edge score of 70. Well, Mark, how could you possibly want to buy the stock here? It's a question I get all the time. Do not, and I repeat, do not make investment decisions purely based on a stock's recent performance. Five years ago, Nvidia was a $20 stock. Two years later, it was a $40 stock. Two years later, it was a $180 stock. Today, it's at $235. That is a gain of over a,000% the past five years. Imagine selling after you doubled your money just because the stock went up. Now, at the same time, I don't ignore that move because the biggest moves also come with rising expectations and usually rising valuation. So, we still have to determine if this is a good buy or not. And this is a much smaller company than something like Broadcom. So, I'm treating this as higher risk, higher potential reward. I'm not sizing light the same way I would be sizing a core holding. I'm sizing it lightly. Earnings for the next year are expected to grow 150% to $18.58 per share, giving the stock a forward PE of 58 times. So, not a cheap stock by any means, but with growth of 150%, the PEG is still well below one, which is intriguing. But at the same time that type of valuation a 50 plusx multiple comes with high expectations which is why you should expect volatility if you get involved with this name. So my October thesis is this AI clusters are becoming so large that optical connectivity is becoming another critical infrastructure bottleneck and Lum is positioned directly in front of that trend. So those are my five stocks for October. Broadcom AI networking Melly is going to be e-commerce. We're getting the pullback so growth and valuation. United Health, Turnaround and Valuation, Uber, Robo Taxi Platform, Opportunity, and then Lum is the AI optical bottleneck. Comment below which of these five stocks you would buy today. And notice something about this list. I'm not simply buying five stocks that performed best in September. I'm looking for confirmation pullbacks misunderstood stories, valuation, and secular trends. So, with September behind us, October historically has been a better month. The market has substantially reduced the probability of an October Fed hike, and we're approaching what has historically been a stronger seasonal stretch for equities, but I'm not interpreting that as buy everything. The 10-year Treasury recently reached 5.3% slightly higher. That's the highest level we have seen in roughly 24 years. And the market still faces inflation, oil, geopolitical risks as well. So, my strategy isn't changing. Great company, right valuation, and right entry point. And right now, these are five stocks that are at the top of my October shopping list. Broadcom, Melly, United Health, Uber, and Lum. And also, make sure you join my private investing community. Stay uptodate with my daily insights on the market. What stocks I'm buying and selling in my option trades. Link is down in the description as well as the pin comment below. Again, let me know in that comment section which of these five stocks would you buy today? Or is there another name that you believe should belong on this list? Drop that ticker below. And if you enjoyed the video, do me a huge favor. Smash that like button down below. Thanks for watching and we'll see you in the next one. Take care.