When volatility strikes the stock market as it sets new highs, investors get nervous. Wild swings in price can often signal a market top. After setting a new record high last month, the S&P 500 has peeled back 5% from that level.

A string of upcoming economic indicators coming out this week could determine whether the economy is heading into a recession or if the Federal Reserve will cut interest rates. Stocks are flailing to and fro as investors try to gauge the direction.

Yet analysts at Bank of America (NYSE:BAC) are confident some companies are poised for further growth, a lot of it. The research arm of the banking giant highlighted the three stocks below for significant double-digit gains. We’re not talking about 10% growth either. The three stocks to buy are expected to jump 72% on average over the next 12 months.

In a choppy market with fears of a recession looming, that’s not small-stakes gambling. Let’s see why the bank believes these are stocks to buy now.

Robinhood Markets (HOOD)

Market volatility is actually good for online brokerage Robinhood Markets (NASDAQ:HOOD). Investors buying and selling stocks as they try to gain an advantage in a dicey market drive revenue higher. Although Robinhood doesn’t charge commissions for trades, it gets paid for trades through payments for order flow, or pushing trades through a market maker. 

Robinhood reported strong second-quarter results where earnings of 21 cents per share trounced analyst consensus estimates of just 15 cents as trading volumes broke records. It also earned interest on surging margin lending as margin balances jumped 20% from last year. They hit a two-year high of $5 billion.

Bank of America analyst Craig Siegenthaler raised his price target on HOOD stock to $32 per share from his previous level of $28. Robinhood stock is up 46% year-to-date. At its current price of around $18.60 per share, it implies additional 72% upside in the stock. Siegenthaler believes the brokerage should “continue benefiting from both total market tailwinds as well as increasing market share from competitors” due to its zero commissions, low margin loan rates and high interest rates on its premium cash balance service.

Day One Biopharmaceuticals (DAWN)

Receiving a big upgrade from Bank of America was Day One Biopharmaceuticals (NASDAQ:DAWN), which saw analyst Alec Stranahan boost his rating from underperform to buy. He also more than doubled his one-year target price from $11 to $24 per share.

The analyst support came after the biotech reported second-quarter results showing significant growth in its first-approved drug, Ojemda. It is a new treatment for pediatric low-grade glioma (PLGG), the most commonly diagnosed pediatric brain tumor. Although it only generated $8.2 million in sales, Day One CEO Jeremy Bender called it a “strong early launch performance.” The drug was only approved in April. Day One also sold in May its priority review voucher (PRV) issued by the FDA for Ojemda for $108 million. A PRV allows for sped-up reviews of therapies by the agency.

Curiously, though, PRVs aren’t attached to the particular drug for which they are awarded. Companies can use them for other drugs in their pipeline, or they can sell them to third parties. It is meant as an incentive for small biotechs to make an investment in drug discovery. That’s what Day One did with its Ojemda PRV.

While Bank of America gave DAWN a new price target that implies 77% upside in the stock, it is actually low compared to other analysts. Piper Sandler has a $40 per share price target on it, JPMorgan Chase set its target at $36 per share and Wedbush Securities has a $33 per share target on DAWN. 

Nextracker (NXT)

Nextracker (NASDAQ:NXT) is the world’s largest manufacturer of intelligent solar tracking systems based on gigawatts (GW) shipped in the U.S. and globally. To gain the most efficiency out of solar panels, following the path of the sun across the sky is the optimal method. Nextracker is the leading provider of utility-scale trackers.

Bank of America analyst Dimple Gosai reiterated her buy recommendation on NXT and incrementally raised her price target to $66 per share from $64. It implies a 67% upside from the solar tracker’s current price of around $38.60 per share.

According to TipRanks, Gosai said ahead of Nextracker’s fiscal 2025 first-quarter report the stock price represented “more than a palatable entry point for an outsized, idiosyncratic and margin expansion story.”

Nextracker subsequently reported 50% growth in net sales to $720 million, its sixth consecutive quarter of double-digit year-over-year revenue growth. Adjusted profits, though, nearly doubled to $139 million or 93 cents per share. CEO Dan Shugar cited “healthy demand dynamics…for solar trackers in both the U.S. and international markets.” Even so, NXT stock is down 17% since the report, making it an even more attractive undervalued value stock to buy.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.