Goldman Sachs Adds Amazon, Occidental Petroleum to U.S. Conviction List

Goldman Sachs has refreshed its U.S. Conviction List, adding five companies spanning the technology, retail, industrial, and energy sectors, according to a research note published Thursday. The new additions are Amazon, Burlington Stores, Huntington Ingalls, Johnson Controls, and Occidental Petroleum.

New Additions and Departures

The Conviction List represents the investment bank's top buy-rated investment ideas from its analysts. The October update reflects a shift in focus toward companies with specific growth catalysts, from artificial intelligence to naval shipbuilding.

Companies added to the list:

• Amazon (NASDAQ: AMZN)
• Burlington Stores (NYSE: BURL)
• Huntington Ingalls (NYSE: HII)
• Johnson Controls (NYSE: JCI)
• Occidental Petroleum (NYSE: OXY)

To make room for the new names, Goldman Sachs removed Air Products and Chemicals, ConocoPhillips, Golar LNG, Loar Holdings, and Tyson Foods from the list.

Analyst Rationale for Key Additions

Goldman's analysts provided specific justifications for each new company on the list, highlighting distinct drivers for potential growth.

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For Amazon, analyst Eric Sheridan cited a strong outlook for revenue growth and margin expansion, driven by AI-related demand for its cloud computing services, improving profitability in e-commerce, and a rapidly growing advertising business.

Analyst Joe Ritchie highlighted Johnson Controls as being in the "early stages of a transformation" that could more than double its earnings per share by 2028. He noted that orders for its AI data center cooling business have grown by over 30% for three consecutive quarters, pushing its backlog to a record $21 billion.

In the energy sector, analyst Neil Mehta pointed to Occidental Petroleum's potential to add 2 billion barrels of oil equivalent to its reserves through advanced recovery techniques. He also noted that cost-saving measures could generate up to $4 billion in additional cash flow by 2030.

Outlook for Industrials and Retail

Huntington Ingalls, a pure-play U.S. Navy shipbuilder, returns to the list after being removed in March. Analyst Noah Poponak highlighted that the company's shipbuilding revenue has increased 15% to 20% for four consecutive quarters.

For retailer Burlington Stores, analyst Brooke Roach projects revenue growth to exceed 10% annually through 2028, supported by new store openings and same-store sales growth of over 3%. The analyst also anticipates improving margins toward the company's long-term target of approximately 10%.