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Macroeconomic uncertainty and potential policy changes under President-elect Donald Trump's administration have pushed the stock market to new highs over the past four weeks. However, investors can benefit from ignoring short-term turmoil and instead focusing on companies that can overcome challenges and deliver solid returns over the long term.
Top Wall Street analysts look for stocks of companies that have strong financials, reliable business models and attractive product offerings.
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.
ServiceNow
This week's first pick is an artificial intelligence workflow automation software company ServiceNow (NOW). The company's third-quarter results beat analysts' expectations thanks to AI-related tailwinds.
After a virtual fireside chat with ServiceNow CFO Gina Mastantuono, Mizuho analyst Gregg Moskowitz reiterated a buy recommendation for NOW shares. The analyst also increased the price target to $1,070 from $980 to reflect the rise in comparative valuation metrics.
The analyst said management is confident in ServiceNow's near-term (Q4) and medium-term (2026) prospects and believes the company is well positioned for sustained growth. Management specifically cited strong demand that is creating generative AI-powered momentum for ServiceNow's Pro Plus SKU offering.
Additionally, Moskowitz highlighted the company's excitement about the growth potential of its new Workflow Data Fabric product, which unifies business and technology data across the enterprise and will enable new workflows and AI agents. The company expects this new product to double its total addressable market to $500 billion and further drive monetization.
“We continue to believe that NOW remains very well positioned for high growth over the next few years, driven by continued demand for workflow automation, strong cross-selling opportunities and AI monetization,” Moskowitz said.
Moskowitz ranks No. 221 among more than 9,100 analysts tracked by TipRanks. Its valuations were profitable 61% of the time and delivered an average return of 14.6%. See ServiceNow insider trading activity on TipRanks.
Snowflake
Next comes Snowflake (SNOW), a provider of data analysis software. The company's shares rose nearly 33% on Nov. 21 as investors cheered better-than-expected third-quarter results.
Impressed with its third-quarter performance, TD Cowen analyst Derrick Wood reiterated a Buy rating on SNOW and increased his 12-month price target to $190 from $180. The analyst noted that the company's performance was impressive across the board and said the quarter marked a turning point in Snowflake's growth story.
Wood noted that key drivers of third-quarter results included benefits from changes in Snowflake's go-to-market (GTM) strategy, as well as lower-than-expected storage issues as demand for new data engineering services The Iceberg product migrations and early launch more than offset Cortex AI services.
The analyst also noted Snowflake's strength in winning large deals, including signing three $50 million deals in the third quarter, and bullish comments on the large deal pipeline in the fourth quarter.
Wood is optimistic about Snowflake's prospects as growth in core data warehousing consumption is more stable. This growth was reflected in Net Retention Rate (NRR) trends and “early attraction to new AI workloads, particularly dynamic tables.”
Wood ranks No. 80 among more than 9,100 analysts tracked by TipRanks. His reviews were successful 66% of the time and delivered an average return of 18.1%. See SNOW stock charts on TipRanks.
Twilio
This week's third pick is Twilio (TWLO), a cloud communications platform. The company impressed investors with its above-average results in the third quarter and raised its full-year revenue forecast. San Francisco-based Twilio attributed its third-quarter performance to its financial discipline and innovation.
Impressed by the recovery in business, Monness analyst Brian White upgraded TWLO stock to “Buy” from “Hold” with a price target of $135.
White noted that the company's digital platform has seen solid demand during the pandemic, with its stock price hitting an all-time high in early 2021. But after the economy reopened, Twilio's growth rate slowed from a high of 4% in the first quarter of 2024 to 4% 67% in the second quarter of 2021 and it faced a bloated cost structure.
However, White argued that after 11 consecutive quarters of slower revenue growth, Twilio's revenue saw a slight acceleration in the second quarter of 2024 and a more significant improvement in the third quarter of 2024. The analyst also pointed to the increase in TWLO's operating margin, thanks to the company's cost-containment efficiency measures as well as divestments.
White is confident in Twilio's ability to combine communications with contextual data and AI. “Looking ahead to 2025, we believe Twilio is on track to continue this recovery and the stock's valuation remains attractive,” he concluded.
White ranks No. 44 among more than 9,100 analysts tracked by TipRanks. Its valuations were profitable 69% of the time and delivered an average return of 20.4%. See Twilio financial reports on TipRanks.