The Nvidia logo at corporate headquarters in Santa Clara, California, May 2022.
Nvidia | via Reuters
The macro backdrop looks challenging as September begins, but analysts have highlighted several stocks on which they are bullish over the long term.
According to top Wall Street pundits, these are five attractive stocks ranked by TipRanks, a platform that ranks analysts based on their past performance.
Nvidia
Let’s start with the chip giant’s shares Nvidia (NVDA), which is posting a phenomenal surge this year as the craze for generative artificial intelligence fuels demand for the company’s graphics processors, or GPUs. The company recently announced its fiscal second quarter results, which beat Wall Street expectations as revenue more than doubled from the year-ago quarter.
Harlan Sur, an analyst at JPMorgan, noted that expectations are high for the second fiscal quarter release. Still, Nvidia delivered results and forecasts that far exceeded estimates thanks to significant demand for the company’s data center products.
The analyst expects the company’s earnings power to grow at over 30% annually over the next few years, reflecting continued strength in the data center segment, a growing automotive revenue pipeline of nearly $14 billion and an additional 1 to $2 billion in software, licensing and subscription revenue over the next 3 to 4 years.
Sur raised his price target to $600 from $500 and reiterated his buy rating on NVDA, stating, “The expansion of generative AI and large speech/transformer models continues to drive growing demand for NVIDIA’s accelerated compute/networking platforms and software solutions.”
Sur is ranked 95th among more than 8,500 analysts on TipRanks. His reviews were successful 65% of the time, with each review delivering an average return of 19.3%. (See Nvidia Hedge Fund Trading Activity on TipRanks).
Marvell technology
Another semiconductor stock on this week’s list is Marvell technology (MURLY). The company managed to beat analysts’ expectations for the fiscal second quarter, even as revenue declined compared to the same period last year. Management expects sequential revenue growth to accelerate in the fiscal third quarter, driven by AI and cloud infrastructure.
In response to the results, Deutsche Bank analyst Ross Seymore reiterated his buy rating on MRVL stock with a price target of $70. The analyst noted that the company delivered modest revenue growth and a moderate outlook, with solid acceleration in AI-related applications offsetting macroeconomic weakness.
“Overall, we remain convinced that MRVL has a compelling portfolio of infrastructure products that address strong long-term growth trends in AI/cloud (electro-optics and significant custom computing), 5G and automotive,” said Seymore.
The analyst believes that Marvell’s infrastructure products, coupled with an eventual cyclical recovery in the storage, cable and on-premises businesses, would help significantly accelerate the company’s growth through calendar 2024.
Seymore ranks 9th out of more than 8,500 analysts tracked on TipRanks. Its reviews were profitable 75% of the time, with each review delivering an average return of 24.2%. (See Marvell Stock Chart on TipRanks)
Palo Alto Networks
Next comes the cybersecurity provider Palo Alto Networks (PANW), which reported better-than-expected results for the fiscal fourth quarter. Revenue rose 26% year over year to $1.95 billion, but fell slightly short of estimates.
BMO Capital Markets analyst Keith Bachman, ranked 584th out of over 8,500 analysts on TipRanks, noted that the company’s guidance for fiscal 2024 was for revenue growth of 19% to 20% year over year and adjusted free cash flow of 37% % to 38% ( FCF margin was above expectations of mid-teens revenue growth and mid-30s FCF margin.
Bachman anticipates that the trend toward consolidating solutions with leading security vendors will continue as the threat landscape evolves and generative AI emphasizes the need for data aggregation. He added that implementing a consolidated portfolio improves the prospects for real-time threat detection and remediation.
The analyst pointed out that customers are increasingly adopting each of PANW’s three platforms (Strata, Prisma and Cortex) as they seek integrated solutions and unified data models. He raised his price target to $275 from $235 and reiterated his buy rating on Palo Alto.
“We believe that the strength of the PANW portfolio and the consolidation of spending are the main drivers for PANW’s long-term goals and the new net NGS ARR.” [next-generation security annual recurring revenue] growth,” Bachman said.
The analyst has a 57% success rate and each of his reviews has averaged 7%. (See Palo Alto Financial Reports on TipRanks).
Intuitive
financial software company Intuitive‘S (INTU) Fourth fiscal quarter results beat analysts’ forecast. However, the company’s earnings outlook for the first quarter of fiscal 2024 fell short of expectations, while its revenue guidance was in line with estimates.
Brad Zelnick, an analyst at Deutsche Bank, explained that the company’s strong fourth-quarter results were due to outperformance by its small business unit, supported by solid growth in the QuickBooks Online (QBO) ecosystem.
At the Innovation and Investor Days, scheduled to take place in September, the analyst expects management to provide more details on Intuit’s AI investments over the past few years and advances in generative AI. He believes the company’s AI initiatives will create value for small business owners, consumers and taxpayers, leading to long-term growth and improved profitability.
Zelnick maintained a “buy” rating on INTU and raised the price target to $575 from $525. He said, “We see his AI-driven expert platform driving accelerated leveraged innovation, enabling sustained EPS growth in the mid-teens or better.”
Zelnick ranks 50th among more than 8,500 analysts on TipRanks. Its reviews were profitable 71% of the time, delivering an average return of 15.4%. (See Intuit Insider Trading Activity on TipRanks)
The cooks camp
We end this week’s list with The cooks camp (COOK), a distributor of specialty foods, essentials and ingredients for chefs and restaurants.
BTIG analyst Peter Saleh pointed out that despite six forecast upgrades in the last 18 months, record sales, gross profit, operating income and EBITDA, CHEF stock is trading at or near the lows of EV/EBITDA and P/E (excluding volatility from the Covid era) is traded.
The analyst expects the company’s revenue to grow 28.5% to $3.36 billion in 2023, supported by about 8% organic sales growth, with acquisitions providing the remaining growth. He argued that while his estimate was for more than double 2019’s sales of $1.59 billion, shares were trading about 25% below pre-pandemic levels. Overall, Saleh believes that CHEF stock is massively undervalued and underappreciated by investors.
Maintaining his Buy rating with a price target of $48, Saleh said, “Given the growth profile, including double-digit revenue and EBITDA growth, we believe CHEF represents a unique opportunity for long-term investors and we keep the stock.” as our small business.” /mid-cap Top Pick.”
Saleh is ranked 402nd out of more than 8,500 analysts tracked on TipRanks. Additionally, 60% of its reviews were profitable, with an average return of 11.1%. (See CHEF’s technical analysis on TipRanks)