Top Wall Street analysts like the growth opportunities for these three stocks

The new year has just begun, but macro uncertainty is already hanging over investors, with Federal Reserve officials raising concerns about inflation and its impact on the path to rate cuts.

In these troubled times, investors can enhance their portfolio returns by adding stocks backed by solid financials and long-term growth opportunities. The investment thesis of the main Wall Street analysts can inform investors how to choose the right actions, as professionals base their analysis on a strong understanding of the macro environment and specific factors of the company.

Here are three stocks favored by the best professionals on the roadaccording to TipRanks, a platform that ranks analysts based on their performance.

Let’s start with the food sharing and delivery platform Uber Technologies (UBER). The company delivered better than expected revenue and earnings for the third quarter of 2024although bulk bookings are not expected.

Recently, analyst Mizuho James Lee reiterated a buy rating on Uber Technologies shares with a target price of $90. The analyst sees 2025 as an investment year for UBER. While these investments may impact the company’s earnings before interest, taxes, depreciation and amortization in the near term, they are expected to fuel long-term growth.

Based on his analysis, Lee expects Uber’s growth investments to drive a 16% compound annual growth rate in core gross bookings from FY23 to FY26, in line with analysts’ daily target of the growth company of the middle to high adolescence. The analyst is confident that Uber’s EBITDA growth is on track with its daily analyst target of 30s to 40% CAGR. “Despite the inclination towards growth investments, economies of scale and increased efficiency should offset margin risks,” Lee said.

Furthermore, Lee thinks that concerns about the growth of the company’s Mobility business seem overstated. The analyst expects a gross growth of bookings FY25 (neutral forex) in the high-teens, with the rate of moderate deceleration compared to the second half of 2024.

Additionally, the analyst projects that gross bookings for Uber’s delivery business will remain in the mid-teens in FY25. This increase is expected to be supported by the increasing adoption of new verticals maintaining the share of the food delivery market. The analyst added that Mizuho’s controls revealed that order frequency reached another all-time high. The checks also indicate solid adoption of the feed in the US, Canada and Mexico with robust user penetration.

Lee is number 324 among more than 9,200 analysts tracked by TipRanks. Their assessments were profitable 60% of the time, providing an average return of 12.9%. To see Uber Technologies stock chart on TipRanks.

We move to Datadog (DOGS), a company that offers cloud-based surveillance and security products. In November, the company announced better-than-expected results for the third quarter of 2024.

On January 6, the Monness analyst Brian White reiterated a buy rating on Datadog shares with a target price of $155. The analyst believes that the company has a more balanced approach towards the generative trend of artificial intelligence, “avoiding the absurd claims propagated by many in the software complex”. He noted that DDOG fared well compared to its peers against a challenging software backdrop in 2024, but added that it lagged other stocks in Monness’s coverage universe.

That said, White thinks Datadog, and the wider industry, will start to see incremental activity in the next 12 to 18 months from the long-term boom in generative AI. Highlighting DDOG’s outperformance compared to peers and its transparency regarding its generative AI progress, the analyst noted that native AI clients represent more than 6% of annual recurring revenue (ARR) of the company in Q3 2024, by more than 4% in 2024. Q2 2024 and 2.5% in Q3 2023.

White also highlighted some of the company’s AI offerings, including LLM Observability and its AI gen assistant, Bits AI. Overall, the analyst is bullish on Datadog and thinks the stock deserves a premium valuation compared to traditional software vendors because of its cloud-native platform, rapid growth and robust secular headwinds in the space of observability, as well as its new generative generation led by AI. growth opportunities.

White is No. 33 among more than 9,200 analysts tracked by TipRanks. Their assessments were profitable 69% of the time, providing an average return of 20%. To see Datadog property structure on TipRanks.

The semiconductor giant Nvidia (NVDA) is this week’s third stock pick. The company is considered one of the biggest beneficiaries of the generative AI wave and has stellar demand for its advanced GPUs (graphics processing units) that are needed to build and run AI models.

After a conversation with Nvidia CFO Colette Kress, JPMorgan analyst South Harlan reaffirmed a buy rating on the stock with a target price of $170. The analyst highlighted the assurance of the CFO that the growth of the production of the Blackwell platform of the company is on track despite the challenges of the chain of supply, thanks to a solid execution.

Additionally, the company expects spending in the data center space to remain strong in calendar year 2025, supported by Blackwell’s growth and broad-based strength in demand. Additionally, Sur noted that management sees massive revenue growth opportunities as it takes a larger share of the $1 trillion datacenter infrastructure installed base.

Sur added that Nvidia expects to benefit from the shift to accelerated computing and the growing demand for AI solutions. Management believes the company has a solid competitive advantage compared to ASIC (application-specific integrated circuit) solutions due to several strengths, including ease of adoption and its complete system solutions.

Agreeing with this point of view, Sur said: “We believe that the enterprise, vertical markets and sovereign customers, will continue to prefer solutions based on Nvidia.”

Among other keys, Sur highlighted the launch of next-generation gaming products and the opportunity to expand beyond high-end gaming into markets such as PC AI.

Sur rans No. 35 among more than 9,200 analysts tracked by TipRanks. Their assessments were profitable 67% of the time, providing an average return of 26.9%. To see Nvidia Hedge Funds Activities on TipRanks.