Amid discussions regarding the Federal Reserve’s interest rate strategy and the hype surrounding artificial intelligence, the American stock market is witnessing significant fluctuations. The current economic uncertainty is also impacting investor sentiment.
Given this uncertain climate, prominent analysts on Wall Street are focusing on stocks with strong foundational metrics that show potential for sustained growth. These insights from top analysts are valuable resources for investors devising their investment strategies.
In light of the current situation, let’s explore three stocks that have received positive reviews from well-known Wall Street analysts, as per TipRanks, an analytics service that evaluates analysts based on their track record and performance.
Delta Air Lines
Starting off with Delta Air Lines (DAL), a major player in the industry and the second-largest airline in the United States. With a wide network of over 4,000 daily flights to more than 290 destinations across six continents, DAL’s extensive operations were highlighted at the recent Toronto Corporate Access Day hosted by TD Cowen. Analyst Helane Becker recommended a ‘buy’ rating for DAL with a target price of $55.
Becker lauds Delta as TD Cowen’s top pick for 2021 and praises the company’s long-term vision and strategic initiatives. She notes, “Delta has been successfully executing a strategic plan over the past 15 years.” According to Becker, Delta’s consistent management and strategy distinguish it from its competitors, making it an attractive investment option.
Becker emphasizes Delta’s strong route network, collaborations with other airlines, and reliable operational performance, which have led to increased customer loyalty over the years. She also highlights Delta’s positive earnings outlook, with a significant increase in premium customer demand and a notable rebound in business travel compared to previous years. Additionally, Delta’s efforts to reduce debt are strengthening its financial position.
Becker ranks 276th among over 8,800 analysts tracked by TipRanks. Her predictions have been profitable 63% of the time, with an average return of 11.2%. (View Delta Air Lines Stock Charts on TipRanks)
Microsoft
Transitioning to the software giant Microsoft (MSFT), which has a significant investment in OpenAI, the developers of ChatGPT. Microsoft is well-positioned to lead the growing generative artificial intelligence (AI) sector.
Ivan Feinseth of Tigress Financial recently reiterated a ‘buy’ rating for MSFT, raising his price target from $475 to $550. He highlights Microsoft’s strong position in the AI space, especially its focus on integrating generative AI capabilities into its software ecosystem and product range.
Feinseth points out that Microsoft’s impressive revenue growth of 17% in the third quarter was driven by the rapid adoption of AI-driven services and cloud offerings. The increased demand for Microsoft’s Azure platform has been particularly favorable for the company’s overall performance.
Furthermore, Microsoft’s expanding presence in the gaming industry and its foray into the Metaverse offer additional growth opportunities. The gaming segment is expected to benefit from the $75 billion acquisition of Activision Blizzard and the launch of the latest Xbox console.
Feinseth also underscores Microsoft’s strong financial position, which allows for better returns for shareholders and sustained investment in AI development.
Feinseth is ranked 242nd out of over 8,800 analysts rated by TipRanks, with a success rate of 60% and an average profit of 12.2%. (Analyze Microsoft Technical Analysis on TipRanks)
Zscaler
Lastly, we look at Zscaler (ZS), a leading player in cloud-based cybersecurity. Through the Zscaler Zero Trust Exchange, the company facilitates secure connections between users, devices, and applications, mitigating cybersecurity threats and data breaches.
Following Zenith Live 2024, Baird’s analyst Shrenik Kothari reiterated a ‘buy’ rating on Zscaler shares with a target price of $260. Kothari highlights Zscaler’s efforts to expand into additional market segments through the enhancement of its core platform.
Kothari specifically mentions Zscaler’s introduction of Zscaler Identity Protection, which leverages advanced machine learning for enhanced cloud security, along with the launch of Cloud Browser Isolation to protect user endpoints and the AI-powered DLP 2.0 solution for safeguarding sensitive data.
With these innovations, Zscaler’s market opportunity has significantly increased, expanding by over $24 billion and broadening its total addressable market to $96 billion. Kothari also points out Zscaler’s shift in sales strategy from transactional to client-centric, aimed at growing the clientele in the $10 million annual recurring revenue segment.
“The success stories of the company, especially in critical sectors like finance, healthcare, and manufacturing, demonstrate Zscaler’s ability to provide scalable security solutions,” observes Kothari.
Among TipRanks’ pool of over 8,800 analysts, Kothari ranks 381st, with a 66% success rate and an average return of 20.6%. (Refer to Zscaler Financial Statements on TipRanks)
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