Concerns about high valuations of artificial intelligence (AI) stocks and a questionable prospect of a rate cut in December weighed on investor sentiment in recent trading sessions. For now, however NvidiaLast week's solid gains seemed to undermine the notion that anything related to AI investing is in a bubble.
Investors looking to capitalize on the recent sell-off and buy long-term attractive stocks can follow the recommendations of top Wall Street analysts. These experts can help provide important insights into a company's growth potential.
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.
Microsoft
Windows and Xbox owners Microsoft (MSFT) is considered one of the biggest beneficiaries of the AI boom. Last month, the company reported better-than-expected fiscal first-quarter results, with revenue from its Azure cloud business rising 40%.
Recently, Baird analyst William Power initiated coverage on Microsoft with a Buy rating and a $600 price target. TipRanks' AI analyst is also bullish on MSFT, giving the company an Outperform rating and a price target of $628.
“Microsoft is leading the AI revolution with infrastructure and applications, supported by its OpenAI relationship, providing an end-to-end AI platform for enterprises and consumers alike,” said Power, explaining his optimism.
Power views MSFT's partnership with ChatGPT parent OpenAI as a key differentiator that will help the company run AI at scale and at high speed. The 5-star analyst said that after pledging to invest $13 billion, Microsoft recently announced an additional investment of $250 billion in Azure over several years.
The analyst discussed the impressive growth in MSFT's total revenue and Azure business in the September quarter, with the cloud business now accounting for 60% of total revenue. Power also highlighted the strength of Microsoft's core applications, including Microsoft 365, LinkedIn and Dynamics. He noted that MSFT's revenue growth in the first quarter of FY26 was accompanied by a solid operating margin of 49% and a free cash flow margin of 33%. Microsoft's strong margins are driving continued double-digit EPS growth, he said.
Power believes in Microsoft's short- and long-term potential, despite the immediate pressures posed by concerns over AI investments.
Power ranks No. 287 among more than 10,100 analysts tracked by TipRanks. Its ratings were successful 57% of the time and delivered an average return of 17%. See Microsoft ownership structure on TipRanks.
Booking stocks
Online Travel Agency (OTA) Booking stocks (BKNG) is another pick this week. The Priceline and Kayak owner posted impressive third-quarter results with double-digit increases in gross bookings and revenue.
Impressed by its third-quarter performance and attractive valuation, Wedbush analyst Scott Devitt upgraded BKNG from Hold to Buy with a price target of $6,000. In comparison, TipRanks AI analyst has a “neutral” rating on Booking Holdings with a price target of $5,406.
“Booking remains the best-positioned OTA in our view” and benefits from several positive aspects, from the size and diversification of the company to solid liquidity and free cash flow conversion, Devitt said.
The top-rated analyst also highlighted management's impressive track record of successfully executing key strategic initiatives. Devitt highlighted Booking Holdings' growing market share in alternative accommodations while optimizing costs and increasing efficiency. The company's cost savings support reinvestment in growth initiatives to achieve longer-term goals, he said.
Additionally, Devitt discussed Booking's impressive growth in key metrics in the third quarter amid better-than-expected global travel demand. Third-quarter gross bookings growth of 14% beat management's forecast by 400 basis points, the analyst said. As a result, Devitt increased its estimate for gross bookings growth in 2025 by 100 basis points to 11.5% from its previous forecast. Additionally, he expects BKNG to report adjusted EBITDA of $9.8 billion, representing a margin increase of about 180 basis points year-over-year.
Devitt is ranked #660 among more than 10,100 analysts tracked by TipRanks. Its ratings were profitable 50% of the time and delivered an average return of 12.3%. See Booking Holdings Financials on TipRanks.
DoorDash
Devitt also improved its rating for the food delivery platform DoorDash (DASH) to buy from the waiting list with a price target of $260. AI analyst at TipRanks rates DoorDash “neutral” with a price target of $211.
DASH shares took a hit when the company reported mixed third-quarter results and said it expects to spend “several hundred million dollars” on new initiatives and developments in 2026.
Devitt believes the decline in DASH shares represents an attractive risk-reward opportunity, with the stock now trading at about 17.7 times its 2027 adjusted EBITDA estimate. The Wedbush analyst noted that the post-earnings selloff was largely due to concerns about the level of capital spending and pressured profit margins.
Devitt acknowledges that the increased spending will hurt near-term margins, but argues that such investments in growth initiatives are justified because they will expand DASH's addressable market and strengthen its product offering.
Specifically, Devitt highlighted management's plans to direct incremental investments in three key areas: “(1) creating a coherent global technology platform, (2) building new verticals and products, and (3) scaling geographic expansion.”
Overall, Devitt is bullish on DoorDash and believes the company has a dominant position in the U.S. food delivery sector. Additionally, he highlighted the company's solid execution of strategic initiatives as management pushes for long-term, sustainable growth. See DoorDash hedge fund activity on TipRanks.