As 2024 unfolds, the landscape of the financial market is witnessing a noteworthy resurgence in optimism, largely propelled by advancements in artificial intelligence (AI). This buoyant sentiment is particularly evident in the S&P 500, which has seen a significant uptick, positively influencing various sectors including technology and utilities. Amid this wave of optimism, investors aiming for sustainable returns must identify companies that not only boast robust short-term performance but also display substantial long-term growth potential. Notably, seasoned Wall Street analysts play a crucial role in guiding investors towards stocks that promise lucrative returns. Here, we explore three stocks that have garnered attention from top pros based on their analysis.
One of the standout companies in the cybersecurity realm is Fortinet (FTNT). Focused on becoming a leader in the secure access service edge (SASE) space, Fortinet intertwines machine learning and AI technology to enhance its cybersecurity offerings. Recent evaluations by TD Cowen analyst Shaul Eyal suggest a positive trajectory for Fortinet, affirming a buy rating on the stock with an ascendant price target of $90, up from $75. Eyal’s insights are grounded in comprehensive channel checks and dialogue with industry stakeholders, indicating a revival in Fortinet’s business dynamics coupled with robust demand across its diverse product suite.
Analysts predict that Fortinet’s revenue and billings for the third quarter will likely meet or exceed the upper limit of the company’s guidance, highlighting the potential for continued growth. Moreover, Eyal conveys optimism for a 12% growth in the fourth quarter, bolstered by promising closure rates and a proactive pipeline strategy heading into a traditionally strong quarter. A pivotal element supporting Fortinet’s resurgence is its operational technology (OT) offerings, which are anticipated to flourish owing to a long-standing replacement cycle for outdated systems. Additionally, the company’s emphasis on cloud security, recently amplified by the acquisition of Lacework, aligns with the rising trend of AI-led networks, suggesting a multifaceted approach to capturing market demand.
Shifting gears to the realm of software development, GitLab (GTLB) emerges as a formidable player. This AI-driven, cloud-based platform aims to enhance developer efficiency while simultaneously streamlining operational processes and minimizing security risks. With insights gleaned from recent interactions with GitLab’s management, Mizuho analyst Gregg Moskowitz backed GitLab with a buy rating and set an ambitious price target of $62. The company is strategically positioned within a $40 billion total addressable market, yet it currently commands a modest share, indicating ample room for growth.
Moskowitz underlines the potential explosion of demand for GitLab’s Duo Pro product in 2025, propelled by the burgeoning generative AI trends. Furthermore, GitLab Dedicated, another product offering, is witnessing unexpectedly high customer engagement, contributing to increased average revenue per unit. The analyst’s confidence in GitLab stems from multiple growth levers, including the possibility of seat expansion, prospective price adjustments, and upsells. Moskowitz’s analytical track record reinforces his credibility, with a respectable success rate, hinting at a promising future for GitLab as it strives to capture its market share.
In the dynamic semiconductor industry, Nvidia (NVDA) continues to shine as a beacon of success, underpinned by remarkable revenue growth. The company stands at the forefront of developing cutting-edge graphics processing units (GPUs), essential for the creation of AI models and applications. Following an insightful investor meeting, Goldman Sachs analyst Toshiya Hari reaffirmed a buy rating for Nvidia, elevating the price target from $135 to $150—a testament to the firm’s growing market appreciation.
Hari’s insights shed light on Nvidia’s unique competitive edge, especially amidst growing complexity in inference workload, which is anticipated to escalate future compute needs. The analyst’s confidence in Nvidia’s prospects aligns with increased spending on accelerated computing and GPUs among data center operators, driven primarily by the AI evolution. He highlighted the significance of Nvidia’s forthcoming Blackwell platform, not only as a revenue booster in the immediate future but as a strategic asset for maintaining competitive superiority. Hari’s adjusted revenue forecasts showcase a thorough understanding of industry dynamics, reflecting heightened cloud expenditures and promising order trends with major AI server original equipment manufacturers.
As artificial intelligence continues to reshape industries while driving market optimism, savvy investors must stay attuned to the potential of key players like Fortinet, GitLab, and Nvidia. The insights provided by leading analysts illuminate the path for identifying opportunities that align with long-term growth aspirations. Understanding the transformative impact of AI within these sectors can pave the way for investments that could yield substantial returns in the evolving economic landscape of 2024 and beyond. Employing a strategic investment approach, grounded in thorough analysis and industry trends, will be essential for capitalizing on the burgeoning potential of AI-driven companies.