Top Wall Street analysts trust these 3 stocks
Investors are dealing with a number of mixed signals as recent data suggests the economy may be weakening while the S&P 500 index is hitting new highs. In this difficult environment, investors can turn to the research of top Wall Street analysts to find stocks with strong balance sheets and solid growth prospects.
With that in mind, today we look at three stocks that are favorites of Wall Street professionals according to TipRanks, a platform that rates analysts based on their past performance.
Micron Technology $MU+2.2%
Micron Technology (MU) is this week's first pick. The chipmaker recently reported fiscal third-quarter results that beat expectations in both revenue and earnings, thanks to growing demand driven by the ongoing wave of artificial intelligence (AI). Management is optimistic about the company's future and expects record revenue in fiscal 2025, supported by AI-driven opportunities.
Goldman Sachs analyst Toshiya Hari reacted to the results by reiterating a Buy recommendation on MU stock and raising his price target from $138 to $158. The analyst sees the stock's post-earnings decline as a good opportunity for investors to build a position. He expects AI-driven demand and disciplined supply to support earnings growth above expectations in calendar year 2025.
Hari highlighted several reasons for his bullish investment view, including market share gains in the lucrative high-bandwidth memory space and the growth of AI computing power in Micron's data centers and edge computing.
Hari also said Micron generated free cash flow of $425 million in the fiscal third quarter, marking a return from several quarters of negative FCF. He added that the company "remains committed to generating positive cash flow in the fourth fiscal quarter and in 2025, despite an expected significant increase in capital expenditures in 2025."
Amazon $AMZN+1.8%
Amazon
AMZNThe second pick is the e-commerce and cloud computing giant, Amazon (AMZN). Recently, Evercore ISI analyst Mark Mahaney reiterated a Buy recommendation on AMZN stock with a $225 price target following his firm's 12th annual U.S. Online Retail survey of 1,100 respondents.
Mahaney said Amazon remains the leader in the U.S. online retail market, which is reflected in three key shopping metrics - price, selection and convenience. However, he pointed out that the survey indicated a mixed competitive environment for Amazon Retail, particularly given the significant improvement in choice and convenience metrics at competitor Walmart (WMT).
Mahaney noted that Amazon remains three to four times ahead of its closest competitor in all three key metrics. Attractive features like Prime Video, Free Same Day Delivery, Prime Music and Grocery made Prime membership more attractive to survey respondents.
Overall, Amazon remains Evercore's "number one large-cap stock to hold for the long term," with the survey results supporting the company's long-term investment thesis. Importantly, the survey supported the analyst's views on three primary catalysts in 2024 - a significant acceleration in Amazon Web Services growth, rising operating margins in the North American retail business, and solid free cash flow margins.
Twilio $TWLO+3.5%
Twilio Inc.
TWLOThe third tip is a cloud communications platform Twilio (TWLO). The company reported better-than-expected results for the first quarter of 2024, with the number of active customer accounts growing to more than 313,000 as of March 31, up from 300,000 at the end of the prior year. However, shares fell after the results were released as estimates for the second quarter disappointed, reflecting the impact of weak customer spending.
However, an analyst at Tigress Financial, Ivan Feinseth, recently initiated coverage on TWLO stock with a buy recommendation and a price target of $75. The analyst sees the stock's decline as an attractive buying opportunity, backed by his belief that "TWLO is well positioned to benefit from the continued acceleration of AI-driven digital customer engagement."
The analyst expects Twilio to benefit from demand for AI-based automated responses that provide timely and cost-effective customer interactions. He expects the company's continued investment in research and development and the integration of predictive and generative AI into new products will support customer growth.
Feinseth also highlighted Twilio's advanced "call center as a service" platform and its leadership position in the communications market. He expects the company's cost-savings efforts and efficiency measures to lead to higher margins and improved profitability.
Feinseth ranks 195th among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, delivering an average return of 13.1%.
Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.
Source: Yahoo Finance, CNBC.