Investors are licking their wounds following a rocky September that sent the S&P 500 down nearly 5%, its worst month of 2023. Hawkishness from the Federal Reserve, a growing sense of fatigue around the AI boom, and signs that the economy is continuing to weaken all contributed to the sell-off last month.

However, October brings the opportunity for a turnaround as a new earnings season is about to kick off. Keep reading to see two stocks that look particularly poised to pop this month.

A space shuttle taking off.

Image source: Getty Images.

1. Meta Platforms

You can make a good argument that Meta Platforms (META -1.64%) deserves to be named the most improved stock of the year. Shares are up by more than 200% from their nadir nearly a year ago as CEO Mark Zuckerberg's Year of Efficiency has paid off.

Zuckerberg made it clear that the company would focus on profitability after emphasizing growth previously. And multiple rounds of layoffs, a reduction in its office footprint, and other cost-cutting (including driving new efficiencies at its data centers) are starting to pay off.

Earnings per share jumped 21% in its most recent quarter, the company is growing revenue by ramping up ads on Reels, its short-form video platform that competes with TikTok, and it's no longer facing headwinds from Apple's crackdown on ad targeting since it has already absorbed that impact.

Meta continues to grow its user base, with a 7% increase in daily active users across its platforms and a 5% increase in daily active users on Facebook. Meanwhile, the company's metaverse project has thus far been a flop, posting billions of dollars in operating losses, but that could soon change. 

The company formally launched the Quest 3 mixed-reality headset at its Connect event last week, and it's set to go on sale next week. A decent showing for the new headset could help Meta earn a higher multiple, and Apple's release of the Vision Pro early next year should help validate the headset market.

Meta introduced new smart glasses, made with Ray-Ban, and made several AI announcements, including rolling out a new generative AI assistant, giving the company a number of different ways to leverage the opportunity in AI.

If Meta can deliver strong results in its third-quarter earnings report later this month, and the Quest 3 is well received, the stock could easily gain a leg up heading into the holiday season.

2. Walgreen Boots Alliance

Investors who bought Meta Platforms near its bottom a year ago have been well rewarded for taking a risk, and Walgreen Boots Alliance (WBA 3.39%) could be at a similar bottom right now.

The pharmacy chain has been struggling for years, but shares have become too cheap to ignore, now trading at a price-to-earnings ratio of less than 6, and a price-to-sales ratio of just 0.14, a level generally reserved for dying retailers. 

However, Walgreens is far from the next Bed Bath & Beyond. It's the No. 2 pharmacy chain in the country, operating in a near duopoly with CVS Health, and owns roughly 13,000 stores globally. It has made some questionable decisions of late, but there's an opportunity for the business to reset and deliver value for investors.

Walgreens is also in the process of filling out its top management. Roz Brewer stepped down as CEO in early September in what the company said was a mutual decision. Brewer seemed like a poor fit for the company because her previous role was as an executive with Starbucks and Walmart's Sam's Club, while Walgreens is primarily a retailer and healthcare business. Chief financial officer James Kehoe left the company in August to pursue a different opportunity.

Walgreens' recent results have been disappointing, to say the least, but some of the headwinds are temporary, including a decline in COVID vaccines and tests, and it should overcome earlier challenges in its acquisitions. A multibillion-dollar settlement over opioid sales has also marred this year's performance, but that's a one-time occurrence.

The company currently offers an 8.5% dividend yield, though that could be cut as Walgreens prioritizes paying down debt.

The good news is that the company is targeting a low- to mid-single-digit increase in adjusted operating income in fiscal 2024, showing the business is stronger than it might otherwise look, delivering profit growth even with a rock-bottom valuation.

Walgreens is set to report fourth-quarter earnings on Oct. 12, and better-than-expected results and decent guidance for fiscal 2024 might give the stock another jolt following a pop last week. Meanwhile, the right hire for the CEO position could set the stock on a path toward long-term growth.

Walgreens isn't about to go bankrupt, and some smart financial and managerial decisions should help put the stock back on track and restore its earlier value.