These underperforming stocks are due for a fourth-quarter comeback, according to Wall Street
After a rocky third quarter, these stocks could be poised for a bounce back in the final stretch of 2023, according to Wall Street. Stocks struggled over the past three months as yields rose , 2023's popular technology trade hit a wall and the Federal Reserve indicated that rates may stay elevated for longer . The S & P 500 and tech-heavy Nasdaq Composite slumped 3.7% and 4.1%, respectively, for the period, and are coming off their worst months of the year . Amid this backdrop, CNBC Pro screened for underperforming stocks that may be due for a comeback in the fourth quarter. We used the following criteria and our stock screener to find the potential winners: Underperformed in the third quarter, falling more than 4%. Loved by analysts with a consensus buy rating and 20% predicted upside. Intact long-term trend trading above 200-day moving average. These are the names that made the cut. Beaten-down technology stocks and recent artificial intelligence mainstays Microsoft and Advanced Micro Devices were included in the screen. Over the past three months, the AI winners have fallen more than 5% and a little over 9%, respectively, due in part to pressures from rising bond yields. MSFT 3M mountain Microsoft shares over the last three months Wall Street sees more upside ahead for both companies even after surging this year on enthusiasm surrounding the technology. The consensus price target for AMD implies another 34% upside, building on its roughly 58% gain in 2023. Meanwhile, Microsoft could rally about 22% from these levels. A handful of cruise stocks that have struggled in recent weeks amid the jump in fuel prices also made the cut. Carnival experienced the biggest slump of the group over the past three months, falling nearly 28%. But shares still hover above their 200-day moving average, with the consensus price target implying more than 29% upside. CCL 3M mountain Carnival shares over the last three months Norwegian Cruise Line and Royal Caribbean also made the list with shares down more than 24% and about 12%, respectively. Royal Caribbean shares could rally another 35% from here — the biggest potential upside of the group. Live Nation Entertainment , Oracle , Netflix and homebuilders Lennar and PulteGroup also met the screen's criteria. — CNBC's Michael Bloom contributed reporting. Read more in CNBC Pro's Quarterly Investment Guide Danger, 'pothole' ahead: Economic growth slowing to a near-halt to end the year Oil prices and the dollar surged in the third quarter. These ETFs can help you reset your portfolio After a rough third quarter, here's what to expect from technology stocks into the end of 2023 Bitcoin has limited upside in the fourth quarter as the possibility of higher rates casts a shadow over crypto