As the calendar turns to a new year, investors find themselves navigating through turbulent macroeconomic waters. Concerns surrounding inflation and the subsequent actions of the Federal Reserve have introduced a layer of uncertainty, prompting many to reassess their investment strategies. In light of these challenges, ambitious investors can still aim for solid portfolio performance by focusing on stocks underpinned by robust financial fundamentals and promising long-term growth trajectories. Insight from leading Wall Street analysts can serve as a valuable compass in this quest, guiding investors toward astute stock selections.
One stock drawing significant attention is Uber Technologies (UBER), the renowned ride-sharing and food delivery giant. The company’s third-quarter results for 2024 were impressive, surpassing both revenue and earnings expectations, even as gross bookings fell slightly short. Analyst James Lee from Mizuho has reiterated his bullish stance on Uber, maintaining a buy rating and setting a price target of $90. Lee views the upcoming year as pivotal for Uber, marking a period of investment that might temporarily strain EBITDA (earnings before interest, taxes, depreciation, and amortization), yet he believes these initiatives will ultimately support substantial growth.
Lee projects a remarkable 16% compound annual growth rate (CAGR) in core gross bookings between FY23 and FY26, which aligns with Uber’s forecasts presented during its recent analyst day. Moreover, he anticipates robust EBITDA growth, projecting a CAGR of around 30% to 40%. Addressing concerns about the company’s Mobility segment, Lee contends that fears are exaggerated. He predicts a stabilization in gross bookings growth for FY25, expecting a rebound into the high teens as the overall economy adjusts. Importantly, Lee’s research indicates an uptick in order frequency—an encouraging sign of consumer confidence in Uber’s delivery services.
Transitioning to the tech sector, Datadog (DDOG) has emerged as a frontrunner in cloud monitoring and security. The company’s performance in the third quarter of 2024 has captivated investors, showcasing results that exceeded expectations. Monness analyst Brian White recently expressed optimism regarding Datadog, reiterating a buy rating with a target price of $155. White regards the company’s approach to the generative AI landscape as measured, eschewing overblown claims that have characterized discussions surrounding artificial intelligence.
Although Datadog experienced slower growth when compared to some peers, White believes a renaissance is on the horizon, driven by an anticipated uptick in demand over the next 12 to 18 months fueled by advancements in generative AI. In his analysis, he highlights Datadog’s notable performance with AI-native customers, who accounted for over 6% of the company’s annual recurring revenue in Q3, a marked increase from previous quarters. White’s endorsement rests on Datadog’s cloud-native architecture and strong growth dynamics that justify a premium valuation relative to traditional software vendors.
Nvidia: Capitalizing on AI-Driven Growth
Lastly, we spotlight Nvidia (NVDA), a semiconductor powerhouse filling an essential role in the AI revolution. Nvidia’s GPUs (graphics processing units) are in high demand due to their necessity for building and operating AI models. Following a discussion with CFO Colette Kress, JPMorgan analyst Harlan Sur maintained a buy rating on the stock, setting a price target of $170. Sur emphasized that Nvidia’s production ramp-up for its Blackwell platform is proceeding efficiently despite supply chain challenges, highlighting the company’s adept operational execution.
Nvidia stands poised to benefit from sustained investments in data centers throughout 2025, as demand for its products shows no signs of abating. Sur notes that Nvidia’s competitive edge is reinforced by the shift towards accelerated computing and the expanding need for AI solutions across various markets. He suggests that Nvidia will continue to garner preference not just among enterprise customers, but also among sectors exploring AI capabilities beyond traditional computing. Sur’s analysis succinctly conveys confidence in Nvidia’s growth prospects, indicating broad-based opportunities across its product lines.
While market uncertainty may present challenges for investors, focusing on fundamentally sound stocks identified by leading analysts can bolster portfolio performance. Companies like Uber, Datadog, and Nvidia illustrate the potential for growth even amidst economic turbulence. By conducting thorough research and leveraging the recommendations of seasoned professionals, investors can navigate the complexities of the market with confidence and seize opportunities for long-term financial rewards.