As the calendar flips to a new year, concerns about macroeconomic uncertainty loom large in the minds of investors. The Federal Reserve’s ongoing discussions about inflation and its implications for interest rates have created a climate of caution. However, amid these turbulence, astute investors have an opportunity to enhance their portfolios by focusing on stocks that are not only backed by solid financials but also boast long-term growth potential. By leveraging the investment insights provided by reputable analysts, investors can make informed stock selections that align with their risk tolerance and market outlook. Here, we will delve into three stocks that have garnered considerable favor among Wall Street’s leading analysts, providing insight into their growth prospects and overall market positions.
Uber Technologies (UBER), a leading platform in ride-sharing and food delivery, has shown resilience, reporting earnings and revenues that surpassed expectations in the third quarter of 2024. Despite a dip in gross bookings, Mizuho’s analyst James Lee remains bullish, reiterating a buy rating with a robust price target of $90. Lee projects that 2025 will be a transformative year for Uber as the company engages in substantial growth investments. While these could temporarily weigh on earnings before interest, taxes, depreciation, and amortization (EBITDA), they are vital for driving long-term growth.
Lee’s analysis indicates a compound annual growth rate (CAGR) of 16% for core gross bookings from fiscal year 2023 to fiscal year 2026, corroborating Uber’s ambitions articulated during its analyst day conference. Moreover, he expresses confidence that the company’s EBITDA growth trajectory aligns with targets of high-30s to 40% CAGR, despite potential margin risks from increased investments. Notably, he dismisses concerns surrounding the future of Uber’s Mobility business, projecting high-teen gross bookings growth in fiscal year 2025 and a steady performance in the Delivery segment—characterized by widening adoption rates across diverse sectors.
Encouraging metrics from Mizuho reveal unprecedented order frequency and high grocery adoption rates across North America. Lee’s reputation as an analyst is underscored by his track record, ranking 324th out of over 9,200 on TipRanks, with a profitable rating history of 60% and an average return of 12.9%.
Datadog (DDOG), specializing in cloud monitoring and security solutions, is another stock that analysts are closely watching. Following the company’s strong performance in its third-quarter results, Monness analyst Brian White reaffirmed a buy rating, setting a price target at $155. White commended Datadog for adopting a balanced mindset toward the burgeoning realm of generative AI, differing from other players in the sector who have made inflated claims.
White’s outlook is optimistic, suggesting that Datadog’s transparency and performance within its competitive landscape position it favorably for future growth as generative AI becomes increasingly mainstream over the next 12 to 18 months. In particular, White acknowledges that AI-enabled customers contribute significantly to Datadog’s annual recurring revenue (ARR), highlighting an increase from 2.5% to over 6% year-over-year as of Q3 2024.
The analyst emphasizes inherently strong tailwinds for Datadog’s cloud-native platform, which he believes justifies a premium valuation compared to traditional software vendors. Furthermore, White’s assessment places him at an impressive 33rd position among peers tracked by TipRanks, with a 69% profitability rate and an average return of 20%.
The third standout stock is Nvidia (NVDA), a titan in the semiconductor industry that is reaping the benefits of the generative AI boom. Following insightful discussions with Nvidia’s CFO, JPMorgan analyst Harlan Sur reiterated a buy rating and set a price target of $170. Sur’s analysis highlights Nvidia’s robust demand for its advanced GPUs, essential for powering AI applications.
Despite facing supply chain challenges, Sur relayed confidence, citing Nvidia’s successful ramp-up of its Blackwell platform production. He attributes the expected sustained strength in data center spending to the growing demand for AI and the escalating shift towards accelerated computing solutions. Sur also underscores Nvidia’s strategic advantages over application-specific integrated circuits (ASIC), noting its comprehensive system solutions and ease of integration within numerous enterprise applications.
As Nvidia diversifies its product range beyond high-end gaming into AI PCs and broader gaming markets, Sur assures investors of significant revenue growth opportunities amidst an expanding market landscape. His analytical prowess places him at 35th among 9,200 analysts on TipRanks, boasting a 67% success rate on his ratings for an average return of 26.9%.
As investors wade through the uncertainty of the economic landscape, stocks like Uber, Datadog, and Nvidia present compelling opportunities for long-term growth. The insights from top analysts—grounded in both macroeconomic understanding and rigorous company-specific analysis—serve as valuable guideposts for informed investment decisions in a volatile market. Investing in these leading firms, with proven resilience in their sectors, could well position investors for success in the year ahead.