Top Wall Street Analysts Favor These Stocks for Growth

Optimism surrounding artificial intelligence (AI) has fueled the growth of the S&P 500 in 2024, particularly lifting key chip stocks and utility sectors. Investors keen on achieving sustainable returns should focus on companies demonstrating solid long-term growth potential.

With this in mind, top Wall Street analysts leverage their expertise to identify key drivers that support a company's growth, helping investors choose stocks likely to provide substantial returns. Here are three stocks that top analysts highlight as strong contenders, according to their performance metrics.

Fortinet

The first pick is Fortinet (FTNT), a leading name in cybersecurity. The company aims to establish itself as a front-runner in secure access service edge technology, utilizing machine learning and AI to enhance its cybersecurity offerings.

Recently, analyst Shaul Eyal from TD Cowen maintained a buy rating on Fortinet, raising the price target from $75 to $90. Eyal’s optimism stems from recent channel checks and conversations with industry insiders, indicating a robust recovery in Fortinet’s business and healthy demand for its comprehensive product range.

Channel checks suggest that Fortinet's third-quarter revenue may touch the upper end of its guidance with potential upside. Eyal projects a 12% revenue growth for Q4, underpinned by favorable closure rates and strong pipeline developments as the seasonally strong fourth quarter approaches.

Key factors driving Fortinet's recovery include solid traction in operational technology products and a long-term replacement cycle for aging systems, alongside increased adoption of AI networks and enhanced focus on cloud security following its acquisition of Lacework.

GitLab

The next highlight is GitLab (GTLB), an AI-driven, cloud-based software platform that boosts developer productivity while minimizing security and compliance risks.

After engaging with GitLab’s management, Mizuho analyst Gregg Moskowitz confirmed a buy rating for the stock, setting a price target of $62. Moskowitz highlighted management’s strong confidence in capitalizing on further opportunities in the estimated $40 billion addressable market, noting that GitLab and Microsoft’s GitHub currently hold a mere 5% market share in the software development lifecycle sector.

Management looks forward to heightened momentum for GitLab's Duo Pro product in 2025, driven by the surge in generative AI technologies. Additionally, there is rising interest in GitLab's Dedicated offering, leading to increased average revenue per user.

Moskowitz remains optimistic about GitLab's capacity to execute and achieve significant growth over the medium to long term due to various potential growth levers, including customer expansion, price adjustments, and upselling opportunities.

Nvidia

Lastly, we look at semiconductor powerhouse Nvidia (NVDA), known for its impressive revenue growth, primarily fueled by the high demand for its advanced GPUs (graphics processing units) used in developing AI applications.

Following an investor meeting with Nvidia’s leadership, analyst Toshiya Hari of Goldman Sachs reiterated a buy rating on Nvidia’s stock, boosting the price target from $135 to $150. This optimism comes from gaining deeper insights into Nvidia's competitive advantages and recognizing the anticipated increase in computational demands driven by AI.

Nvidia's management shared confidence regarding sustained demand for accelerated computing and GPUs, particularly among data center operators, amidst the ongoing generative AI boom. They also outlined promising prospects for their Blackwell platform, which is expected to significantly bolster Nvidia's competitive edge and revenue growth in the near to medium future.

Hari has adjusted his revenue forecasts for the fiscal years 2025-2027 to reflect recent positive industry shifts, including higher cloud spending and resilient order trends from major AI server manufacturers.

stocks, growth, analysts