The first stock pick favored by the Street’s top pros is chipmaker Micron Technology (MU). Despite recent data suggesting a softening economy, Micron has reported beats on both the top and bottom lines for the fiscal third quarter. This success has been attributed to the demand induced by the ongoing artificial intelligence (AI) wave. As a result, management is confident about the road ahead and expects to generate record revenue in fiscal 2025. Goldman Sachs analyst Toshiya Hari reiterated a buy rating on MU stock and increased his price target to $158 from $138 post-earnings. Hari expects AI-driven demand and disciplined supply to fuel better-than-consensus earnings growth in calendar year 2025. With market share gains in the high-bandwidth memory space and AI compute growth in Micron’s data center business and edge computing, there is a bullish investment thesis for Micron. Additionally, the company’s commitment to driving positive cash flow and increase in capex for FY2025 indicate a positive outlook for investors.
Amazon (AMZN)
Moving on to e-commerce and cloud computing giant Amazon (AMZN), Evercore ISI analyst Mark Mahaney reaffirmed a buy rating on AMZN stock with a price target of $225 following his firm’s 12th Annual U.S. Online Retail survey. According to the survey results, Amazon remains the market leader in the U.S. online retail space when it comes to price, selection, and convenience metrics. While there is a mixed competitive backdrop for Amazon Retail, especially with the notable improvement by rival Walmart (WMT), AMZN remains ahead by three to four times across all key metrics. The penetration of Amazon Prime has touched a record high of 81%, indicating customer satisfaction with services like Prime Video, Free Same Day Delivery, Prime Music, and Grocery. These attractive features have made Prime membership more appealing to survey respondents. Overall, Amazon remains Evercore’s top Large Cap Long, with three fundamental catalysts expected in 2024 – accelerated growth of Amazon Web Services, rising operating margins of the North American Retail business, and solid free cash flow margins.
Twilio (TWLO)
Cloud communications platform Twilio (TWLO) is the third stock pick favored by Wall Street analysts. Despite a decline in shares following better-than-expected results for the first quarter of 2024, Twilio is seen as well-positioned to benefit from the ongoing acceleration of AI-driven digital customer engagement. Tigress Financial analyst Ivan Feinseth initiated coverage of TWLO stock with a buy rating and a price target of $75, citing the company’s potential in the AI-based automated responses market. He expects Twilio to gain from continued investment in research and development, integration of predictive and generative AI into new products, and advancements in its “call center as a service” platform. With a focus on cost-saving efforts, efficiency measures, and increased profitability, Twilio is poised for growth in the communications market.
Investors are faced with a complex market environment where economic signals are mixed, but the S&P 500 continues to surge to new highs. As they navigate this landscape, turning to research from top-rated Wall Street analysts can provide valuable insights into stocks with strong balance sheets and growth prospects. Stocks like Micron Technology, Amazon, and Twilio present compelling investment opportunities based on their performance and potential growth in their respective sectors. By considering the recommendations of seasoned analysts, investors may be able to make informed decisions that align with their investment objectives and risk tolerance levels.