As we embark on a new year, investors are met with a landscape fraught with macroeconomic uncertainties. The concerns voiced by Federal Reserve officials regarding inflation and its implications for interest rates add significant complexity to the financial environment. In such turbulent times, investors are urged to bolster their portfolios by targeting stocks that are underpinned by robust financials and promising long-term growth trajectories. This article delves into the insights provided by top analysts, guiding investment choices through the murky waters of today’s market conditions. Here we explore three stocks that have garnered favorable recommendations from leading Wall Street experts.
Uber Technologies (UBER), a prominent player in the ride-sharing and food delivery sectors, recently reported its third-quarter earnings for 2024, surpassing revenue and earnings forecasts—albeit with gross bookings that fell short of expectations. Mizuho analyst James Lee has reiterated a “buy” rating on Uber’s stock, assigning a price target of $90. Lee anticipates that 2025 will be a pivotal investment year for the company, suggesting that these strategic investments might initially suppress earnings before interest, taxes, depreciation, and amortization (EBITDA).
However, these investments are expected to engender substantial long-term growth. Lee predicts a compound annual growth rate (CAGR) of 16% in core gross bookings from fiscal year 2023 to 2026, aligning with the company’s mid- to high-teens growth aspirations articulated during its analyst day. Additionally, he underscores the resilience of Uber’s earnings trajectory, which is projected to achieve high-40s CAGR, affirming his confidence in the company’s operational efficiencies and margin enhancements despite the challenging headwinds.
Lee’s analysis also counters the narrative that growth in Uber’s Mobility business is stalling, forecasting a robust recovery in gross bookings in FY2025. His checks indicated unprecedented order frequency and a significant customer base adoption in new areas including grocery deliveries across the U.S., Canada, and Mexico. Lee ranks in the top 3.5% among over 9,200 analysts tracked by TipRanks, with a successful rating record bolstered by an average return of 12.9%.
Turning to the realm of tech, Datadog (DDOG) has emerged as a key contender in cloud monitoring and security solutions. Following its recent quarterly report that exceeded expectations, Brian White from Monness has maintained a “buy” stance on Datadog with a target price set at $155. White appreciates Datadog’s prudence in navigating the generative artificial intelligence (AI) landscape, steering clear of exaggerated claims that have muddied the waters for many software firms.
Despite facing a tough backdrop in the software industry, Datadog has distinguished itself by showcasing transparency and steady performance metrics, including a notable rise in AI-native customers driving annual recurring revenue (ARR). This growth was recently noted as contributions from these clients increased significantly compared to previous quarters. White attributes Datadog’s scalability and operational agility to its cloud-native architecture, which positions the company to capture rising trends in observability and generative AI-enhanced solutions.
As one of TipRanks’ higher-performing analysts, ranking at No. 33, White boasts a commendable success rate, with profitable ratings 69% of the time and an impressive average return of 20%.
Last, but certainly not least, Nvidia (NVDA) stands as a beacon in the semiconductor industry, riding the wave of demand fueled by the generative AI boom. The company’s powerful graphics processing units (GPUs) are critical for the development and operation of AI applications. Recently reaffirmed by JPMorgan analyst Harlan Sur with a “buy” rating and a price target of $170, Nvidia remains optimistic about its growth trajectory.
Sur highlights a promising outlook following discussions with the company’s CFO, who reaffirmed that the production of Nvidia’s Blackwell architecture is progressing as planned, overcoming supply chain challenges. Furthermore, Nvidia is poised to benefit from the increasing investments in data centers anticipated throughout 2025, with solid opportunities to diversify well beyond traditional markets into AI and high-performance computing platforms.
Nvidia is recognized for its substantial competitive advantages over traditional application-specific integrated circuits (ASICs), offering comprehensive system solutions that cater to various vertical markets. Moreover, Sur’s ranking at No. 35 among analysts reflects his expertise and reliability, with a stellar 67% success rate in his ratings producing an average return of 26.9%.
As investors navigate the intricate landscape of 2024, maintaining a focus on stocks with strong fundamentals and growth potential is crucial. The insights provided by leading analysts on Uber, Datadog, and Nvidia highlight strategic opportunities that await discerning investors. By capitalizing on these recommendations and understanding the broader market dynamics, investors can position themselves to weather uncertainty and pursue robust returns in the months ahead.