Amid conversations concerning the Federal Reserve’s interest rate strategies and the hype surrounding artificial intelligence, the stock market in the United States is witnessing substantial impact. Furthermore, the ambiguity surrounding the economic path plays a role in shaping investor sentiment.
In this unsettled atmosphere, top analysts on Wall Street are focusing on equities that demonstrate strong foundational indicators and exhibit potential for continuous expansion. For investors outlining their plans, the insights from these eminent analysts are invaluable assets.
Given the current circumstances, let’s explore three equities that have received positive evaluations from highly-regarded experts on Wall Street, as outlined by TipRanks, a data analysis service that assesses analysts based on their track record and performance.
Delta Air Lines
First in line is Delta Air Lines (DAL), the major player in the industry and the second-largest airline in America. With over 4,000 daily flights to more than 290 destinations spanning across six continents, DAL’s extensive operations received recognition at the recent Toronto Corporate Access Day hosted by TD Cowen. Analyst Helane Becker endorsed DAL with a ‘buy’ rating and a target price of $55.
Becker advocates for Delta as TD Cowen’s top selection for 2021, praising how Delta is investing in its services, but what truly stands out is their forward-thinking approach. “Delta has a well-thought-out plan that has been successfully executed over the past 15 years,” she affirms.
According to Becker, DAL’s consistency in leadership and strategy sets it apart from competitors, often indicating a more appealing investment opportunity. She lauds Delta’s robust network of routes, collaborative partnerships with other airlines, and noteworthy operational reliability – evident from the increased customer loyalty over the past decade.
Becker also highlighted Delta’s earnings remarks acknowledging a significant increase in demand from premium customers and a marked resurgence in business travel, showing substantial improvements compared to the prior year. Additionally, Delta’s continuous efforts to reduce debt are reinforcing its financial position.
Becker holds the ranking of No. 276 among more than 8,800 analysts tracked by TipRanks. Her forecasts have realized gains 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), as a significant investor in OpenAI, the developers of ChatGPT, Microsoft is poised to lead the emerging generative AI sector.
Ivan Feinseth from Tigress Financial recently reiterated his ‘buy’ recommendation on MSFT, raising his price target from $475 to $550. He points to Microsoft’s strong position to dominate the AI landscape, particularly through its commitment to integrating generative AI capabilities into its vast software ecosystem and product range.
Feinseth underscores that the company’s impressive revenue growth of 17% in the third fiscal quarter was primarily fueled by the rapid adoption of AI-driven services and AI cloud offerings. Microsoft’s cloud division, especially the Azure platform, has witnessed a surge in demand, indicating positive prospects for the company’s overall performance.
Moreover, Microsoft’s expanding presence in the gaming sector and its forays into the Metaverse provide additional growth avenues. Particularly, the gaming division is expected to benefit from the acquisition of Activision Blizzard valued at $75 billion and the launch of the latest Xbox console.
Feinseth also emphasizes Microsoft’s sturdy financial position, which supports enhanced returns for shareholders and enables sustained investment in AI development.
Feinseth is ranked at No. 242 out of over 8,800 analysts evaluated by TipRanks, with a robust 60% success rate and an average profit of 12.2%. (Analyze Microsoft Technical Analysis on TipRanks)
Zscaler
The final pick in this week’s selection is Zscaler (ZS), a leading player in cloud-based cybersecurity. Through its Zscaler Zero Trust Exchange, the company ensures secure connections among users, devices, and applications by neutralizing cyber threats and data breaches.
Following Zenith Live 2024, Baird’s analyst Shrenik Kothari maintained a ‘buy’ rating on Zscaler shares, setting a target price of $260. Reflecting on the key points from the event, Kothari comments on Zscaler’s ambition to tap into additional market segments by expanding its core platform.
Kothari highlights Zscaler’s launch of Zscaler Identity Protection, leveraging advanced machine learning for enhanced security across cloud operations, alongside the debut of Cloud Browser Isolation, safeguarding user endpoints, and the AI-equipped DLP 2.0 solution, designed to protect sensitive data.
With these innovations, Zscaler’s market potential has significantly expanded, with Kothari noting a growth of over $24 billion, broadening their total addressable market to $96 billion. He further emphasizes Zscaler’s shift in sales strategy from transactional to customer-centric, intended to boost the client base within the $10 million annual recurring revenue segment.
“The success stories of the company, especially in critical sectors like finance, healthcare, and manufacturing, reaffirm Zscaler’s ability to deliver security solutions at scale,” Kothari observes.
Among the pool of over 8,800 analysts on TipRanks, Kothari ranks at No. 381, with his recommendations proving profitable 66% of the time and yielding an average return of 20.6%. (Refer to Zscaler Financial Statements on TipRanks)
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