As we step into 2024, the investment community is grappling with a mix of optimism and caution. The Federal Reserve’s recent warnings about inflation cast a shadow over the market, leading investors to reassess their strategies. In such a volatile environment, identifying stocks that are not only financially sound but also poised for long-term growth becomes critical. Insights from top Wall Street analysts can guide investors in selecting opportunities that may yield substantial returns. This article highlights three stocks currently favored by seasoned analysts, providing a fresh look at their potential amid macroeconomic uncertainties.
Uber Technologies: A Mixed Bag with Growth Potential
Uber Technologies (UBER) remains a focal point in the discussions surrounding innovative business models. Following its Q3 2024 earnings, the company reported revenues that exceeded expectations, although its gross bookings did not meet them. Analysts, like Mizuho’s James Lee, have a positive outlook on Uber, maintaining a buy rating with a considerable price target set at $90. Lee anticipates that 2025 will be a year of strategic investments, which may temporarily impact earnings before interest, taxes, depreciation, and amortization (EBITDA). Even so, these investments are expected to spearhead robust growth in the following years.
Lee projects a compound annual growth rate (CAGR) of 16% for core gross bookings between FY23 and FY26, aligning with Uber’s own targets for mid- to high-teens growth. Despite concerns surrounding Uber’s Mobility business, Lee believes these fears are overstated, predicting a steady pace of gross bookings growth for 2025. Furthermore, positive signals from the company’s delivery segment and increasing order frequency add to the bullish sentiment surrounding its future. Lee ranks commendably among his peers, reinforcing confidence in his insights.
Datadog: Striking a Balance in a Competitive Market
Turning to the tech sector, Datadog (DDOG) stands out as a company adeptly navigating the challenges presented by the software landscape. In November, Datadog delivered a surprising Q3 performance, prompting Monness analyst Brian White to affirm a buy rating with a price target of $155. White appreciates Datadog’s measured approach to the general artificial intelligence (AI) trend, contrasting it with the overly ambitious claims often seen in the tech industry.
Datadog’s growth trajectory in recurring revenue from AI-native customers is particularly noteworthy, having grown from 2.5% in Q3 2023 to over 6% in Q3 2024. This trend indicates a solid footing in a market that is rapidly evolving and expanding. White highlights Datadog’s innovative offerings, including its LLM Observability and Bits AI assistant, underlining the company’s strategic positioning within the burgeoning sphere of generative AI. With White’s strong track record and emphasis on Datadog’s unique cloud-native advantages, investors may find this stock a compelling choice for long-term growth.
Finally, no discussion of promising investments would be complete without mentioning Nvidia (NVDA), a titan in the semiconductor industry. Nvidia is perched at the forefront of the generative AI boom, witnessing unprecedented demand for its advanced GPUs, a critical component in AI model development. After engaging with Nvidia’s CFO Colette Kress, JPMorgan analyst Harlan Sur reaffirmed a buy rating and set a price target of $170, citing proactive management despite current supply chain challenges.
Sur pinpointed a robust outlook for data center spending, anticipated to thrive in 2025, buoyed by Nvidia’s strategic ramp-up of its Blackwell platform. The firm’s foresight in expanding beyond traditional markets into AI and vertical solutions posits it as a preferred choice for enterprise and government customers alike. This strategic pivot not only underscores Nvidia’s competitive edge but also highlights significant growth opportunities that could reshape the market landscape.
As investors navigate the uncertain macroeconomic waters of 2024, focusing on stocks backed by strong fundamentals and growth potential is essential. Uber, Datadog, and Nvidia each present unique opportunities that, according to analysts, could bolster portfolio returns despite market volatility. By leveraging insights from reputable analysts and remaining attuned to broader market trends, investors can strategically position themselves for potential gains in a year full of challenges and transitions. This proactive approach, combined with a careful analysis of individual companies’ trajectories, could well set the stage for a successful investment year.