October 2026 Stock Watch List

As I'm writing this blog post, it's Tuesday, September 8, 2026. The temperature here in Central Wisconsin is set to reach a high of 73 degrees Fahrenheit later today. Rain is in the forecast throughout the day, so I likely won't be spending any time outside.

With that aside, I'm probably finished with capital allocation for the month of September 2026. So, I will be taking now as an opportunity to highlight several stocks at the top of my watch list over the next few weeks and heading into October 2026. Let's dive into it!

Stock #1: Amazon.com (AMZN)

The first stock on my watch list for October 2026 is Amazon.com. Readers will notice that this one has become a frequent flyer on the Watch List blog posts, having just appeared in the September 2026 Stock Watch List blog post as well.

The gist of the thesis is that AMZN's Q2 2026 earnings report validated the investment thesis. AWS recorded the strongest quarter of growth since Q4 2021. That was when AWS grew revenue by about 40% to an annual run rate of $71 billion. In Q2 2026, the segment's growth accelerated from 28% in Q1 2026 to 37% in Q2 2026 (concluding the second quarter with a $169 billion annual run rate). That was more than double the 17% growth of AWS in Q2 2025 on a much smaller base. This offers the clearest proof that AMZN's outsized capex in recent years is bearing fruit.

AMZN's AI and chips businesses also each surpassed $25 billion annual run rates in Q2 2026 (with triple digit percentage YOY growth rates). Only NVIVIA and Broadcom have bigger businesses.

Just like I noted in the previous post of this series, North America and International net sales growth were also strong. Each segment's net sales grew at mid-teens percentage rates in Q2 2026. That sets up AMZN's OCF per share growth to top 25% annually over the next few years.

The company's AA S&P credit rating with a stable outlook also drives home the point that its financial positioning is impeccable.

GNG Research

From the current $256 share price, the stock is priced at a forward 12-month P/OCF ratio of 12.2. That's much lower than the 10-year average P/OCF ratio of 23.5 and 36% less than my $398 fair value per share estimate (a fair value multiple of 19). This also represents a 29% discount to the $361 fair value per share estimate (a fair multiple of approximately 17) from my friends at GNG Research.

Stock #2: Broadcom (AVGO)

The next stock on my watch list for next month is Broadcom.

AVGO stands at the intersection of high-performance custom semiconductor for major hyperscalers and enterprise infrastructure software. Driven by massive secular tailwinds in AI and strategic acquisitions (e.g., VMware), the company has cements its place as a critical backbone of modern digital infrastructure.

These secular growth catalysts explain why the FAST Graphs analyst consensus is for non-GAAP EPS to compound by 60%+ annually through FY 2028 (~71%, 64%, and 63%), off a FY 2025 base of $6.82. Because AVGO is growing so fast, the balance sheet is also being deleveraged. That's why it enjoys an A- S&P credit rating with a positive outlook.

AVGO's 0.7% dividend yield is modest. However, the non-GAAP EPS payout ratio is set to be in the low-20% range in FY 2026. That provides it plenty of room to compound the payout at a low double-digit percentage rate annually for the foreseeable future, while also retaining capital for growth.

At the current $362 share price, AVGO is trading at a forward 12-month P/E ratio of just 20.1. This is far below the three-year FAST Graphs average P/E ratio of 30.4 and 28% under my fair value per share estimate of $505 (a fair value P/E ratio of 28).

Stock #3: BlackRock (BLK)

The third stock on my watch list for October 2026 is BlackRock. Readers can find my investment thesis in my August 2026 Stock Watch List blog post and my July Seeking Alpha article.

The gist of my thesis is that net revenue and adjusted diluted EPS vaulted higher by double-digits in Q2 2026. That was made possible by the eighth straight quarter of organic base fee growth surpassing 5% (it was 8% in Q2 2026). BLK's YTD net inflows of $321 billion in the first half of 2026 more than doubled the first half of 2025.

Because of this operating momentum, the FAST Graphs analyst consensus is for the asset manager's adjusted diluted EPS to compound by 15.1% annually through 2028, off a 2025 base of $48.09. BLK's balance sheet is also a fortress, with an AA- S&P credit rating and a stable outlook. That provides it with a low cost of capital to further complement its business with additional bolt-on acquisitions.

BLK's 2% dividend yield is right in the sweet spot for me. This is because the adjusted diluted EPS payout ratio is poised to be in the low-40% range for 2026. That paves the way for more double-digit percentage dividend hikes over the next few years.

GNG Research

From the current $1,122 share price, the stock is priced at a forward 12-month P/E ratio of 18.1. That's 12% below the FAST Graphs 10-year average P/E ratio of 20.7 and my fair value per share estimate of $1,278 (a fair value multiple of 20.7). This is also 14% less than the $1,300 fair value per share estimate from GNG Research.

Stock #4: PepsiCo (PEP)

The next stock on my watch list for next month is PepsiCo. Curious readers can find my investment thesis in the July Seeking Alpha article that I did for Treading Softly.

The crux of it is that PEP is showing resilience in international markets and through higher net prices. That helped its net revenue to grow by 6.4% to $24.18 billion in Q2 2026. The company's core EPS edged 3.8% higher to $2.20 during the quarter.

PEP plans to maintain its focus on permissible and portion-control innovation (i.e., healthier or functional options and portion-control formats). Functional hydration and zero-sugar beverages promise to be key growth areas for PEP. Better price points on multipacks and variety packs are aimed at appealing to budget-conscious shoppers to drive volume growth.

Actions to create value through bundles and combined food-and-beverage solutions at away-from-home channels/enterprise productivity goals are also tailwinds. Thus, the FAST Graphs analyst consensus is for constant currency core EPS to rise by 5.3% annually through 2028, off a 2025 base of $8.14.

Like BLK, PEP's A+ S&P credit rating also affords it a low cost of capital for bolt-on acquisitions to further complement its business. The consumer staple's 4.3% dividend yield provides a significant lift to the income of my basket of stocks for this month. This starting income is also secure, with the payout ratio positioned to be in the upper-60% range for 2026. That should allow for 4% to 5% annual dividend growth over the next several years.

At the current $138 share price, PEP is trading at a forward 12-month P/E ratio of 15.5. This is well below the FAST Graphs 10-year average P/E ratio of 22.8 and 14% under my updated fair value per share estimate of $160 (18x).

Stock #5: WEC Energy Group (WEC)

The final stock on my watch list for October 2026 is WEC Energy Group. My investment thesis is largely the same as it was in my June Seeking Alpha article.

WEC's $37.5 billion five-year capital spending plan can drive the expected rate base growth needed for high single-digit percentage annual diluted EPS growth for the foreseeable future. The driving factor for this sizable capex is the attractiveness of the I-94 corridor to large customers, such as data centers. The land is relatively flat and undeveloped, which is a positive for such customers. As is the fact that Wisconsin's climate reduces the energy required for mechanical cooling, which is a major expense for data centers. The abundant supply of water from the Great Lakes is the icing on the cake.

WEC is also financially sound, with an A- S&P credit rating and a stable outlook. The 3.6% dividend yield is secure, too. The payout ratio is likely to register in the high-60% range, which should support approximately 7% annual dividend growth over the next few years.

GNG Research

From the current $107 share price, WEC is priced at a forward 12-month P/E ratio of 18.2. That's moderately below the FAST Graphs 10-year average P/E ratio of 21 and 7% under my $115 fair value per share estimate (a fair value P/E ratio of 19.5). Shares are also trading at a 9% discount to the $117 fair value per share estimate of GNG Research (roughly 20x).

Concluding Thoughts:

That's it for now. Five world-class companies that I'd like to add to in October 2026. My planned allocation for the month should keep me around a mid-2% yield while offering plenty of upside potential through a combination of growth and undervaluation.

Discussion:

Are any of AMZN, AVGO, BLK, PEP, or WEC on your watch list for October 2026?

If not, what stocks are you watching for next month?

Thank you for your readership and I look forward to your comments below!