Top Wall Street Analysts Like the Growth Opportunities for These Three Stocks

The new year has barely begun, but macroeconomic uncertainty is already looming over investors, with Federal Reserve officials expressing concern about inflation and its impact on the path of rate cuts.

In these unstable times, investors can improve their portfolio returns by adding stocks backed by strong financials and long-term growth opportunities. The investment thesis of top Wall Street analysts can inform investors in choosing the right stocks, as professionals base their analysis on a solid understanding of the macroeconomic environment and company-specific factors.

Here are three stocks favored by the best professionals on the streetaccording to TipRanks, a platform that ranks analysts based on their performance.

We start with a shared transportation and food delivery platform Uber Technologies (UBER). The company posted better-than-expected revenue and profits for the third quarter of 2024although gross reserves did not meet expectations.

Recently, analyst Mizuho James Lee reiterated a buy rating on Uber Technologies shares with a $90 price target. The analyst sees 2025 as an investment year for UBER. While these investments could impact the company’s earnings before interest, taxes, depreciation and amortization in the short term, they are expected to drive long-term growth.

Based on his analysis, Lee expects Uber’s growth investments to drive a 16% compound annual growth rate in core gross bookings from FY23 to FY26, in line with the company’s daily analyst target of a growth of between medium and high adolescent. The analyst is confident that Uber’s EBITDA growth is on track with his daily analyst target of 30-40% CAGR. “Despite leaning toward growth investments, economies of scale and greater efficiency should offset margin risks,” Lee said.

Additionally, Lee believes concerns about the growth of the company’s Mobility business seem overblown. The analyst expects FY25 gross bookings growth (currency neutral) to be in the mid-teens, with the pace of slowdown to moderate compared to the second half of 2024.

Additionally, the analyst projects that gross bookings for Uber’s delivery business will remain in the mid-teens in FY25. This increase is expected to be supported by the growing adoption of new verticals, while maintaining food delivery market share. The analyst added that Mizuho’s checks revealed that order frequency has reached another all-time high. Checks also indicate strong grocery adoption in the US, Canada and Mexico, along with strong user penetration.

Lee is ranked 324th out of more than 9,200 analysts tracked by TipRanks. Their ratings have been profitable 60% of the time, with an average return of 12.9%. See Uber Technologies Stock Charts on TipRanks.

We moved to data dog (DOG), a company that offers cloud monitoring and security products. In November, the company announced better-than-expected results for the third quarter of 2024.

On January 6, the Monness analyst Brian Blanco reiterated a buy rating on Datadog shares with a $155 price target. The analyst believes the company has a more balanced approach to the generative AI trend, “avoiding the absurd claims propagated by many across the software complex.” He noted that DDOG did well compared to peers in a challenging software environment in 2024, but added that it was lagging other stocks in Monness’ coverage universe.

That said, White believes Datadog, and the industry as a whole, will start to see incremental activity in the next 12 to 18 months due to the long-term rise of generative AI. Highlighting DDOG’s superior performance compared to its peers and its transparency regarding its progress in generative AI, the analyst noted that native AI customers accounted for more than 6% of the company’s annual recurring revenue (ARR) in the third quarter of 2024, compared to more than 4% in Q2 2024 and 2.5% in Q3 2023.

White also highlighted some of the company’s AI offerings, including LLM Observability and its generation AI assistant, Bits AI. Overall, the analyst is bullish on Datadog and believes the stock deserves a premium valuation compared to traditional software vendors due to its cloud-native platform, rapid growth, and strong secular tailwinds in the observability space. , as well as its new generative generation led by AI. growth opportunities.

White is ranked 33rd out of more than 9,200 analysts tracked by TipRanks. Their ratings have been profitable 69% of the time, with an average return of 20%. See Data dog ownership structure on TipRanks.

Semiconductor giant NVIDIA (NVDA) is this week’s third stock pick. The company is considered a major beneficiary of the generative AI wave and is seeing stellar demand for its advanced GPUs (graphics processing units) needed to build and run AI models.

After a fireside chat with Nvidia CFO Colette Kress, JPMorgan analyst Harlan South reaffirmed a buy rating on the stock with a $170 price target. The analyst highlighted the CFO’s confidence that ramping up production of the company’s Blackwell platform is on track despite supply chain challenges, thanks to strong execution.

Additionally, the company expects spending in the data center space to remain strong in calendar year 2025, supported by Blackwell growth and broad-based strength in demand. Additionally, Sur noted that management sees huge revenue growth opportunities as it takes over more of the trillion-dollar data center infrastructure installed base.

Sur added that Nvidia hopes to benefit from the shift toward accelerated computing and the growing demand for artificial intelligence solutions. Management believes the company has a strong competitive advantage compared to ASIC (application-specific integrated circuit) solutions due to several strengths, including ease of adoption and its comprehensive systems solutions.

Agreeing with this view, Sur said: “We believe that enterprises, vertical markets and sovereign customers will continue to prefer Nvidia-based solutions.”

Among other key takeaways, Sur highlighted the launch of next-generation gaming products and opportunities to expand beyond high-end gaming into markets such as AI-enabled PCs.

Sur is ranked 35th out of more than 9,200 analysts tracked by TipRanks. Their ratings have been profitable 67% of the time, with an average return of 26.9%. See Nvidia hedge fund activity on TipRanks.