CoinDesk Report:
Investors are grappling with a mixed bag of signals as recent data suggests the economy may be softening while the S&P 500 index surges to new highs. Navigating this complex environment, investors may turn to top Wall Street analysts’ research in search of stocks with strong balance sheets and robust growth prospects. Accordingly, based on TipRanks’ data, here are three stocks favored by top Wall Street professionals, ranked according to analysts’ past performance.
Micron Technology
Micron Technology (MU), a chip manufacturer, emerges as the top pick this week. The company recently reported increased revenue and profits for the third quarter, driven by sustained demand from the artificial intelligence wave. Management remains confident in future prospects, anticipating record revenues for fiscal year 2025 supported by AI-driven opportunities. Given these outcomes, Goldman Sachs analyst Toshiya Hari reiterated a Buy rating on MU stock, raising the target price from $138 to $158. Hari sees the stock’s pullback after earnings as an opportunity for investors to position themselves, projecting earnings growth above consensus expectations driven by AI-related demand and tight supply through the 2025 calendar year. Hari underscores several reasons for his bullish investment thesis, including market share gains in high-margin DRAM and growth in AI computing in Micron’s data center and edge computing segments. Highlighting Micron’s generation of $425 million in free cash flow in Q3, Hari notes this marks a rebound from several quarters of negative FCF. He adds that the company “remains committed to driving positive cash flow in Q4 and fiscal 2025, even with expected significant capital expenditures in fiscal 2025.” Hari ranks 25th among over 8,900 analysts tracked by TipRanks, with a success rate of 69% and an average return of 29.2%.
Amazon
Turning to e-commerce and cloud computing giant Amazon (AMZN), Evercore ISI analyst Mark Mahaney reaffirmed a Buy rating with a target price of $225. Recently conducting its 12th annual U.S. online retail survey with 1,100 respondents, the company continues to lead the U.S. online retail space across key shopping metrics tracked—price, selection, and convenience. However, Mahaney cautions that the competitive landscape in Amazon’s retail business remains mixed, with significant improvements noted by competitors like Walmart (WMT) particularly in selection and convenience metrics. Mahaney points out that across all three critical metrics, AMZN leads its closest competitor by three to four times. Moreover, customer satisfaction has continued to rise, growing 2% year-over-year to reach 84%, a substantial increase from 65% in 2020. The analyst believes the score improvement “reflects Amazon’s ongoing focus on speed and selection (especially through regionalization efforts).” Mahaney also notes a historic high penetration rate of 81% for Amazon Prime, with attractive features like Prime Video, free same-day delivery, Prime Music, and Grocery enhancing Prime members’ appeal in the survey sample. Overall, Amazon remains Evercore’s “top large cap bull,” with survey results supporting the company’s long-term investment thesis. Notably, survey findings support the analyst’s view on three key catalysts for 2024—significant AWS acceleration, improvement in North American retail operating margin, and stable free cash flow profitability. Mahaney ranks 20th among over 8,900 analysts tracked by TipRanks, boasting a success rate of 63% and an average return of 32.2%.
Twilio
The third pick this week is Twilio (TWLO), a cloud communications platform. While the company reported better-than-expected performance for Q1 2024 with active customer accounts increasing to over 313,000, the stock saw a decline post-earnings due to weaker-than-expected guidance for Q2, reflecting soft customer spending impacts. Nevertheless, Tigress Financial analyst Ivan Feinseth recently initiated coverage on TWLO with a Buy rating and a target price of $75. Feinseth sees the sell-off as an attractive buying opportunity, believing that TWLO is well-positioned to benefit from continued acceleration in AI-driven digital customer engagement. The analyst expects Twilio to capitalize on demand for AI-driven automated responses to ensure timely and cost-effective customer interactions. He anticipates the company will continue investing in R&D, integrating predictive and generative AI into its new products to enhance customer adoption. Feinseth also highlights Twilio’s cutting-edge “contact center as a service” platform and its industry-leading position in the communications market. He forecasts cost-saving measures and efficiency initiatives will improve profit margins and enhance profitability. Feinseth ranks 195th among over 8,900 analysts tracked by TipRanks, with a success rate of 61% and an average return of 13.1%.
