Concerns about the prospect of higher interest rates over a longer time horizon remain on investors' minds, even as stocks hit new highs.
Still, 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 while choosing the best names for their portfolios.
With that in mind, here are three stocks that are favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on past performance.
Amazon
First up is the e-commerce and cloud computing giant Amazon (AMZN). Despite a difficult macroeconomic environment, the company achieved a solid improvement in earnings in 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 reiterated a Buy rating on AMZN stock with a price target of $180.
Erickson expects growth in the company's Amazon Web Services business to accelerate significantly in 2024 after optimizing customer spending last year. Additionally, he expects the company's earnings before interest and taxes to be above average in 2024, driven by stronger performance from its retail business than its cloud unit.
The analyst is also bullish on AMZN's advertising business, expecting it to generate robust growth driven by multiple partnerships and Prime Video ads.
Finally, Erickson said of the possibilities of AMZN's generative artificial intelligence and Bedrock platform for developing AI applications: “We expect AMZN to 'take part' in the GenAI narrative battle between itself, GOOGL & MSFT as Bedrock builds partnerships and gains traction.”
Erickson is ranked #175 among more than 8,600 analysts tracked by TipRanks. Its ratings were profitable 55% of the time and delivered an average return of 19.6% each time. (See Amazon hedge fund trading activity on TipRanks)
DoorDash
Delivery platform DoorDash (HYPHEN) is the next choice this week. The company's strong execution, cost discipline and growth investments helped the company deliver impressive results last year.
On January 9, BMO Capital analyst Brian Pitz initiated coverage of DASH with a Buy rating and a $120 price target, calling the company a “beneficiary of categorical and secular consumer tailwinds.”
The analyst believes DoorDash is an industry leader with enormous and growing market opportunities around the world. Specifically, the analyst estimates the company's total addressable market at $2.2 trillion in the U.S. and $2.5 trillion in Europe. This represents a significant increase from the total TAM of $600 billion at the time of the company's IPO in 2020.
Pitz noted that year-over-year order growth in DoorDash's U.S. marketplace accelerated in the third quarter of 2023 across restaurant and non-restaurant categories. He emphasized that new vertical growth also accelerated in the third quarter. Additionally, the analyst stated that the company is already generating positive Adjusted EBITDA and is on track to achieve GAAP profitability.
Pitz ranks 117th among more than 8,600 analysts tracked by TipRanks. Its ratings were successful 77% of the time, delivering an average return of 20.1% each. (See DoorDash technical analysis on TipRanks)
Nvidia
We're finally switching to the semiconductor giant Nvidia (NVDA). The stock delivered excellent returns last year due to strong demand for the company's generative AI graphics processing units.
JPMorgan analyst Harlan Sur reiterated a buy rating on NVDA stock following a presentation by Nvidia's vice president of healthcare, Kimberly Powell, at JPMorgan's 42nd annual healthcare conference. Sur has a price target of $650.
The analyst highlighted that the healthcare industry has already generated more than $1 billion in revenue in FY24, two to three years ahead of the targeted period. This growth has been driven by increasing computational needs for AI in drug discovery, genomics, patient diagnostics and robotics. According to him, healthcare is one of the top three industries in the company's data center segment.
“NVIDIA’s ability to drive accelerated computing solutions through its HPC [high performance computing] and AI/DL [deep learning] “Platforms continue to provide significant revenue opportunities for the company,” Sur said.
The analyst noted the company's optimism about the enormous opportunities emerging in computational drug discovery and demand for BioNeMo, Nvidia's generative AI platform for drug discovery, which is now in beta. He expects the competitive position of Nvidia's healthcare industry to be strengthened by the recent partnerships with Nvidia Amgen (AMGN) and a clinical-stage techbio company Recursive pharmaceuticals (RXRX).
Sur is ranked #75 among more than 8,600 analysts tracked by TipRanks. Its ratings were profitable 67% of the time and delivered an average return of 19.9% each time. (See Nvidia insider trading activity on TipRanks)