The post-election rally has seen some turbulence in recent days, giving investors a bumpy ride in the short term. However, these turbulent markets can present many opportunities – for those who know where to look.
Investors should not focus too much on short-term volatility when positioning their portfolios. Wall Street recommendations can help you make informed stock decisions and achieve solid long-term returns.
Top analysts look at several aspects when selecting stocks from companies with solid fundamentals and strong execution.
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
We start this week with the e-commerce and cloud computing giant Amazon (AMZN). The company impressed investors with above-average third-quarter sales and profits, driven by the strength of its cloud and advertising businesses.
In response to the solid third-quarter numbers, Monness analyst Brian White reiterated his Buy rating on Amazon shares and increased his price target from $225 to $245. While the analyst acknowledged the regulatory pressure, he remains bullish on AMZN as he expects the company to continue to “benefit from the cloud, grow its digital advertising business, innovate with AI, achieve efficiencies through a regional fulfillment network and a leaner cost structure will be used”. “
White highlighted that Amazon's revenue growth accelerated to 17%, with significant profit growth. Notably, third-quarter operating profit beat estimates, resulting in a record operating margin of 11%. He also pointed to the strong sequential increase in operating margins in Amazon Web Services (AWS) and international business. Due to the solid results, the analyst increased his revenue and earnings per share estimates for 2024 and 2025.
White also noted that Amazon is focused on reducing costs through improved efficiencies and new initiatives such as regionalizing its U.S. fulfillment network. The company now aims to regionalize its US inbound network and leverage advanced robotics innovations across its fulfillment network.
Overall, White sees lucrative growth potential for Amazon in e-commerce, AWS, digital media, advertising, Alexa, robotics, artificial intelligence and other areas.
White ranks No. 38 among more than 9,100 analysts tracked by TipRanks. Its ratings were profitable 69% of the time and delivered an average return of 20.4%. See Amazon stock charts on TipRanks.
Uber technologies
We now move on to this week's second choice, the ride-sharing platform Uber technologies (ABOVE). The company recently delivered better-than-expected sales and profits in its third quarter. However, it fell short of Wall Street's expectations for gross bookings for the third quarter.
Still, Evercore analyst Mark Mahaney remains bullish on UBER stock. After a series of investor meetings with management, he reiterated his Buy rating with a price target of $120.
Mahaney expects UBER to benefit from the introduction of autonomous vehicles, as the company is the largest demand aggregator for ride-sharing. He added that greater availability of robotaxis on the Uber platform will lead to improved customer service through shorter wait times, a wider selection of rides and potentially lower prices.
“UBER believes the economics it can offer AV owners can be compelling, allowing them to achieve very high margins and better fleet utilization than they could achieve on their own,” Mahaney said.
Based on his discussions with management, Mahaney explained that the slowdown reflected in Uber's mobility bookings growth in the third quarter and the fourth quarter estimate is due to the negative demand elasticity caused by the increase in insurance costs and causing a slowdown in “Party Hour” bookings will be those that take place in the evenings and weekends. He expects this slowdown to moderate given the slowing of insurance cost growth, the growth prospects of new products such as Uber for Teens and Uber for Business, and a potential improvement in consumer discretionary demand.
Finally, Mahaney remains confident that Uber can continue to grow its earnings before interest, taxes, depreciation and amortization and free cash flow margins over the next three to five years, supported by numerous measures to increase cost efficiency.
Mahaney ranks No. 34 among more than 9,100 analysts tracked by TipRanks. His reviews were successful 64% of the time and delivered an average return of 28.9%. See Uber Technologies stock options on TipRanks.
block
Finally, let’s take a look at the fintech giant block (square). The company, formerly known as Square, narrowly beat analysts' earnings expectations but missed third-quarter revenue estimates.
Following the results, BTIG analyst Andrew Harte discussed the pros and cons of Block's third-quarter performance. He noted that the company's initial forecast for gross profit growth of at least 15% for FY25 was almost in line with the consensus estimate of 14.9%. However, fourth quarter gross profit guidance fell short of expectations at 14% as the timing of certain expected benefits shifted from the fourth quarter to next year.
The analyst believes that CEO Jack Dorsey did a good job highlighting the company's lending products and how they drive the growth of the block ecosystem. Despite weak fourth-quarter guidance and management comments suggesting investors will have to wait until the second half of 2025 for growth to accelerate, SQ stock remains a top pick for BTIG.
Harte cited several reasons for his bullish stance, including Block's track record of exceeding forecasts and the stock's attractive valuation of 12x FY25 EV (enterprise value)/EBITDA. He added that the company is still in the early stages of driving product adoption across both its Cash and Square ecosystems, indicating further growth potential.
“Block is just beginning to integrate its Cash App and Square ecosystems, which could lead to significant flywheel effects over time,” Harte said, while reiterating a Buy rating on the stock with a $90 price target.
Harte is ranked #152 among more than 9,100 analysts tracked by TipRanks. Its valuations were profitable 75% of the time and delivered an average return of 63.8%. See block hedge fund activity on TipRanks.