Top Wall Street analysts pick these stocks for solid returns
Worries over the prospect of elevated interest rates for a longer time horizon linger on investors' minds, even as stocks reach fresh highs.
Nonetheless, analysts remain focused on the bigger picture and are bullish on stocks that offer attractive long-term growth prospects. Investors can weigh the recommendations of Wall Street's top analysts as they pick out the best names to add to their portfolios.
With that in mind, here are three stocks favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Amazon
First up is e-commerce and cloud computing giant Amazon (AMZN). Despite a challenging macro backdrop, the company delivered solid improvement in its earnings for the first nine months of 2023, supported by its cost-control measures.
Recently, RBC Capital analyst Brad Erickson called Amazon one of his favorite ideas in the internet space in 2024. The analyst reaffirmed a buy rating on AMZN stock with a price target of $180.
Erickson expects the growth in the company's Amazon Web Services business to witness notable re-acceleration in 2024, following optimization in spending by clients last year. Additionally, he expects the company's 2024 earnings before interest and taxes to outperform, driven by a stronger performance by the retail business rather than the cloud unit.
The analyst is also upbeat about AMZN's advertising business and anticipates that it will generate robust growth, driven by several partnerships and Prime video ads.
Finally, regarding generative artificial intelligence opportunities and AMZN's Bedrock platform for building AI applications, Erickson said, "We expect AMZN to gain 'share' in the GenAI narrative battle between itself, GOOGL & MSFT as Bedrock builds partnerships and gains more traction."
Erickson ranks No. 175 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 55% of the time, with each delivering an average return of 19.6%. (See Amazon Hedge Funds Trading Activity on TipRanks)
DoorDash
Delivery platform DoorDash (DASH) is the next pick this week. The company's strong execution, expense discipline and growth investments helped it deliver impressive results last year.
On Jan. 9, BMO Capital analyst Brian Pitz initiated coverage of DASH with a buy rating and a price target of $120, calling the company a "beneficiary of categorical and consumer secular tailwinds."
The analyst thinks that DoorDash is a category leader with a huge and expanding market opportunity across the globe. In particular, the analyst estimates the total addressable market for the company to be $2.2 trillion in the U.S. and $2.5 trillion in Europe. This marks a considerable increase from the overall TAM of $600 billion at the time of the company's initial public offering in 2020.
Pitz noted that the year-over-year growth in DoorDash's U.S. marketplace orders accelerated in the third quarter of 2023 across restaurant and non-restaurant categories. He highlighted that new vertical growth also accelerated in the third quarter. Further, the analyst specified that the company is already delivering positive adjusted EBITDA and is on track to generate GAAP profitability.
Pitz holds the 117th rank among more than 8,600 analysts tracked by TipRanks. His ratings have been successful 77% of the time, with each delivering an average return of 20.1%. (See DoorDash Technical Analysis on TipRanks)
Nvidia
We finally move to semiconductor giant Nvidia (NVDA). The stock generated stellar returns last year due to the robust demand for the company's graphics processing units in generative AI.
JPMorgan analyst Harlan Sur reaffirmed a buy rating on NVDA stock following a presentation by Nvidia's vice president of health care, Kimberly Powell, at the JPMorgan 42nd annual health-care conference. Sur has a price target of $650.
The analyst highlighted that the health-care vertical has already generated more than $1 billion in revenue in FY24, two to three years ahead of the targeted time period. This growth was fueled by the rising computational demand for AI in drug discovery, genomics, patient diagnostics and robotics. He thinks that the health-care business features among the top three verticals of the company's data center segment.
"NVIDIA's ability to drive accelerated computational solutions through its HPC [high performance computing] and AI/DL [deep learning] platforms continue to drive significant revenue opportunity for the firm," said Sur.
The analyst noted the company's optimism about the emerging massive opportunity in computer-aided drug discovery and the demand for BioNeMo, Nvidia's generative AI platform for drug discovery, which is now advancing into the beta phase. He expects the competitive positioning of Nvidia's health-care vertical to be strengthened by its recent partnerships with Amgen (AMGN) and clinical-stage techbio company Recursion Pharmaceuticals (RXRX).
Sur ranks No. 75 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, with each delivering an average return of 19.9%. (See Nvidia Insider Trading Activity on TipRanks)