Wall Street analysts say these stocks have more room to run through the rest of 2023

Published Sat, May 27 20238:00 AM EDT

Wall Street analysts have named several must-own stocks for summer and beyond. These companies have upside potential with more room to run, they said. CNBC Pro combed through top Wall Street research to find stocks to buy for the rest of 2023. They include Fastly , Clean Energy Fuels, Amazon , Palo Alto Networks and ConocoPhillips . Fastly "Fastly is laying the foundation for long-term success," according to Bank of America analyst Tal Liani. The firm said the cloud-computing platform provider is well positioned for the "second half and beyond." "Several positive trends signal the stability of Fastly's turnaround story," he said. Those developments include a year-over-year gain in new customers, plus decreased capital expenditures, which has allowed for technology enhancements. Further, Fastly is "rolling out simpler product packaging and pricing tiers that should remove customer acquisition friction down market and encourage cross sell across the platform," Liani noted. In addition, Fastly posted a solid earnings report in early May, he wrote. Shares of the company are up a whopping 88% this year, but Bank of America still sees more room for the stock to run. "We reiterate our Buy and $26.50 PO and highlight favorable underlying fundamentals and strong management execution which should continue to support Fastly's turnaround story," Liani said. Clean Energy Fuels "Margin improvement is on deck heading into the second half," Raymond James analyst Pavel Molchanov said of natural gas distributor Clean Energy Fuels. The company is in the process of expanding its business beyond conventional natural gas, and that augers well for the future, according to the analyst. "Clean Energy's business model is diversifying from its historical status as purely a fuel distributor towards starting in-house production of [renewable natural gas] in 2023," Molchanov said. He acknowledged some uncertainty around this process, but ultimately patient investors should be rewarded for what he said is a growth story. "For 2024, we estimate EBITDA approximately tripling, this being the first year with a meaningful contribution from in-house RNG production, though there is no avoiding the question marks surrounding project timing and startup costs," he wrote. The firm upgraded the stock in early April and said it's sticking with its outperform rating. Raymond James noted the stock can be sensitive to state and local policy issues. Shares are down nearly 22% year to date. Amazon Mizuho elevated e-commerce giant Amazon to a top second-half pick earlier this week. In particular, Mizuho analyst James Lee said his recent checks show that "AWS' [generative AI] demand has been accelerating due to its ease-of-transition and product differentiation." Generative AI is a form of artificial intelligence that AWS uses to create content for clients. Demand is robust in the financial services and media industries, Lee wrote. "Furthermore, Gen-AI is priced meaningfully higher than conventional computing, so it is both revenue and margin accretive," he said. Lee also raised his price target on the stock to $160 from $145. He said growth should rebound in a big way for AWS through the rest of 2023. "We view this as a positive inflection point which should remove the negative narrative of AWS' Gen-AI market position vs. peers," Lee said. Shares of Amazon are up about 43% this year. ConocoPhillips - Goldman Sachs, buy rating "Stay Buy with Conoco our top pick among the Big 3 US majors for 2H2023. … We reiterate our Buy rating on ConocoPhillips following the company's 1Q23 results, which came in above GS/Street expectations, with a production beat driven by better-than-expected Lower 48 volumes. We view the stock as advantaged among our US Major coverage, where we remain Buy-rated on COP, with 26% total return vs our Neutral ratings on both XOM/CVX with ~14% total return." Amazon - Mizuho, buy rating "Our recent checks with a leading channel-partner indicate AWS' Gen-AI demand has been accelerating due to its ease-of-transition and product differentiation. … Furthermore, Gen-AI is priced meaningfully higher than conventional computing, so it is both revenue and margin accretive. … We view this as a positive inflection point which should remove the negative narrative of AWS' Gen-AI market position vs. peers." Clean Energy Fuels - Raymond James, outperform rating "Margin improvement is on deck heading into second half. … CLNE business model is diversifying from its historical status as purely a fuel distributor towards starting in-house production of RNG in 2023. … For 2024, we estimate EBITDA approximately tripling, this being the first year with a meaningful contribution from in-house RNG production, though there is no avoiding the question marks surrounding project timing & startup costs." Fastly - Bank of America, buy rating "We reiterate our Buy and $26.50 PO and highlight favorable underlying fundamentals and strong management execution which should continue to support Fastly's turnaround story. Underlying trends remain encouraging Several positive trends signal the stability of Fastly's turnaround story. … Setting up for a successful 2H and beyond Fastly is laying the foundation for long term success. … The company is rolling out simpler product packaging and pricing tiers that should remove customer acquisition friction down market and encourage cross sell across the platform." Palo Alto Networks - Barclays, overweight rating "PANW sets up well through the summer because: (1) Q4 has become increasingly strong seasonally; (2) we think street margins in FY24 can go up, which is why we are ahead of the street. Given the macro impacts we've seen in security prints this quarter, we don't expect PANW to raise its FY23 guide by more than the 3Q beat."