Top Wall Street analysts see solid potential in these five stocks

There’s more to investing in the right stocks than buying them after a hot earnings report.

Investors can be better informed by researching the opinions of Wall Street experts, especially when it comes to the details of companies’ quarterly results.

Here are five stocks picked by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Topping this week’s list is a cloud-based customer relationship management software provider Salesforce (CRM). The company recently announced that it will increase the prices of some cloud products by an average of 9% starting in August.

This marked the first price increase for Salesforce in seven years. It also comes at a time when cloud players are under pressure as customers optimize IT spending due to macro issues. (See Salesforce Blogger Reviews and Sentiments on TipRanks)

BMO Capital analyst Keith Bachman believes the company’s new generative AI products and core cloud products, including Sales, Service and Marketing clouds, as well as price increases on Tableau, could drive growth in FY2025 (calendar year 2024). .

The analyst added that generative artificial intelligence increases the importance of data, thus providing an advantage to companies that can help consolidate, corporatize and protect data. “We think Salesforce is well-positioned to help companies leverage data, including GenAI,” Bachman said.

Bachman reiterated his buy rating on Salesforce and raised his price target to $255 from $245. He is ranked #463 out of over 8,500 analysts tracked on TipRanks. Also, 59% of its ratings were profitable, with an average return of 8.6%.

PC manufacturers, including Dell (DELL), faced significant headwinds as demand for desktops and laptops eased after a pandemic-driven rush.

However, Deutsche Bank analyst Sidney Ho emphasized that recent data points on the PC supply chain show that inventory is normalizing, raising hopes that PC shipments will reach seasonally higher levels in the second half of 2023.

Ho sees the benefit of guidance for Dell’s Customer Solutions Group (CSG), which is “roughly flat” on a quarterly basis with financial results for the second quarter. Additionally, Gartner data shows that business demand trends are gradually improving, which works well for Dell as it has a 23% higher market share in the commercial PC market compared to a 9% share in the consumer PC market. However, Ho warned of continued risks in the server market.

“Looking beyond the cyclical downturn, we believe a strong capital returns program could be a source of EPS upside for DELL, especially as its leverage ratio approaches its target level,” Ho said.

Ho raised his price target on DELL to $60 from $48 and reiterated his buy rating. The analyst is ranked #65 out of over 8,500 analysts on TipRanks. Ho’s ratings were profitable 66% of the time, with an average return of 23.9% each. (See DELL Insider Trading Activity on TipRanks)

Next on our list is the US electric car manufacturer Rivian (RIVN), impressed investors earlier this month with higher-than-expected shipments for the second quarter. The company also confirmed annual production guidance of 50,000 vehicles for 2023.

Mizuho analyst Vijay Rakesh sees the possibility of Rivian exceeding its 50,000 production guidance. The analyst noted that production in the second quarter rose 49% quarter-on-quarter to 14,000 units, easily beating his estimate of 23% growth.

“We see strong 1H23 deliveries positioning RIVN well for future ramps in 2H23E and beyond,” said Rakesh, who is ranked 32nd out of over 8,500 analysts on TipRanks. (See Rivian Financial Reports on TipRanks)

The analyst raised the 2023 delivery estimate for Rivian’s R1 vehicle lines to about 39,000 units from 37,000, while keeping the estimate for EDVs (electric delivery vans) at 11,000. The analyst expects Rivian to deliver more than 92,000 and 115,000 vehicles in 2024 and 2025, respectively.

In line with his bullish stance, Rakesh raised his price target for RIVN to $30 from $27 and maintained a buy rating. Rakesh has a success rate of 64% and each of his ratings has returned an average of 23.9%.

Rakesh is also bullish on Mobileye Global (MBLY), an Israeli autonomous driving technology provider. Recent trends in electric vehicles and advanced driver assistance systems (ADAS) bode well for Mobileye, the analyst said.

Zeekr, a major customer of Geely Automobile’s EV brand Mobileye, is increasing its production to 27,000 units, up 80% sequentially in the June quarter, Rakesh noted. This suggests stronger prospects for Mobileye’s SuperVision systems in the June and September quarters.

The analyst now expects SuperVision units to rise 83% this year to about 163,000 from a forecast of 150,000. He also thinks that problems at Volkswagen’s Cariad software division could create new opportunities for SuperVision in Porsche and other Volkswagen brands.

Rakesh raised his price target on MBLY to $48 from $43 and reiterated a buy rating on the stock. “We continue to see MBLY well positioned with ~70% market share and a strong AV (autonomous vehicle) roadmap,” he said. (See Mobileye Hedge Fund Trading Performance on TipRanks)

The rapid development of OpenAI’s ChatGPT has sparked great interest in generative artificial intelligence. Tech giants including Google parent Alphabet (GOOGLE), have joined the race and are investing heavily to capture opportunities in this space.

Ivan Feinset, an analyst at Tigress Financial Partners, believes that the increased integration of AI functionality will allow Alphabet to expand into search, mobile, cloud, data center, home automation, autonomous vehicle technology and more.

He also expects to benefit from the increased integration of the company’s Android operating system into Internet of Things devices. It will also benefit from the adoption of Android as the main driver of their infotainment platforms by several leading automotive original equipment manufacturers.

In addition, GOOGL continues to build and strengthen its product portfolio through strategic acquisitions and collaborations, including those focused on artificial intelligence technology. Indeed, the company is a backer of AI startup Anthropic.

“GOOGL’s strong balance sheet and cash flow enable continued funding of key growth initiatives, strategic acquisitions and further shareholder returns through continued share repurchases,” said Feinseth.

Feinseth raised his price target on GOOGL to $172 from $160 and maintained a buy rating on the stock. The analyst is ranked #201 out of over 8,500 analysts on TipRanks. Its ratings are 61% profitable, with an average return of 13.2% per rating. (See alphabetical stock chart on TipRanks)