Top Wall Street Analysts Recommend These Stocks for Growth

The optimism surrounding artificial intelligence (AI) has significantly boosted the S&P 500 in 2024. This surge has positively impacted key chip stocks and essential players in the utilities sector. As investors look for sustainable returns, identifying companies with solid long-term growth potential becomes crucial.

To assist investors in this endeavor, top Wall Street analysts leverage their expertise to highlight the main factors that can promote a company's long-term growth. This insight helps in identifying stocks likely to yield satisfactory returns. Here are three stocks highly favored by leading professionals on Wall Street, according to performance data from TipRanks.

Fortinet

The first recommended stock is Fortinet (FTNT), a prominent player in the cybersecurity sector. Fortinet aims to lead in the secure access service edge industry by utilizing machine learning and AI technologies to deliver effective cybersecurity solutions.

Recently, Shaul Eyal, an analyst from TD Cowen, has reaffirmed a buy rating on Fortinet's stock and increased the price target from $75 to $90. Eyal’s analysis suggests that recent channel checks and conversations with industry insiders indicate a continued recovery in Fortinet's business, coupled with healthy demand across its extensive product range.

Moreover, these checks imply that Fortinet's revenues and billings for the third quarter may reach the upper limits of the company's outlook, with potential for a modest increase. The analyst remains optimistic about Fortinet's revenue growth in the fourth quarter, estimating a growth rate of 12% due to 'robust closure rates and a growing pipeline heading into a seasonally strong Q4.' Eyal noted that Fortinet's recovery is primarily supported by strong traction in its operational technology products, spurred by a long-term replacement cycle for outdated systems. Additionally, Fortinet is benefitting from the increasing adoption of AI-driven networks and its enhanced focus on cloud security, further strengthened by the recent acquisition of Lacework.

GitLab

The next stock to consider is GitLab (GTLB), an AI-supported, cloud-based software platform that aids organizations in improving developer productivity, operational efficiency, and in navigating security and compliance risks.

After meeting with GitLab's management, Mizuho analyst Gregg Moskowitz reasserted a buy rating on GitLab's stock with a price target set at $62. He highlighted management's strong confidence in seizing additional opportunities within the $40 billion total addressable market. Currently, GitLab and Microsoft's GitHub hold a mere 5% market share in the software development lifecycle sector.

Management expects an increase in demand for GitLab's Duo Pro product by 2025, primarily fueled by the generative AI trend. Moskowitz also emphasized GitLab's excitement regarding its Dedicated offering, which is garnering unexpectedly high customer interest and contributing to increased average revenue per unit. Overall, he remains positive about GTLB's ability to execute its growth strategy effectively over the medium to long term, bolstered by various growth avenues such as seat expansion and potential price hikes.

Nvidia

Lastly, but certainly not least, is Nvidia (NVDA), a well-known semiconductor giant. The company has exhibited remarkable revenue growth, driven by rising demand for its advanced graphics processing units (GPUs) required for developing AI models and applications.

After an investor meeting with Nvidia's management, Toshiya Hari from Goldman Sachs reiterated a buy rating on Nvidia's stock, increasing the price target from $135 to $150. The analyst's positive outlook stems from a better appreciation of Nvidia's competitive edge and anticipated increases in the complexity of inference workloads, which will significantly influence future compute demand.

Hari noted Nvidia's confidence regarding the demand for accelerated computing and GPUs, particularly from data center operators amidst the generative AI expansion. The company also highlighted promising prospects for its forthcoming Blackwell platform, viewing its launch and ramp-up as vital near- to medium-term revenue growth catalysts that would further enhance Nvidia's competitive position. The analyst has updated his revenue projections for fiscal years 2025-2027 to reflect recent developments in the industry, including a rise in cloud expenditures and favorable ordering patterns among leading AI server original equipment manufacturers like Dell and Hewlett Packard Enterprise.

stocks, growth, AI