According to Wall Street Analysts, Nasdaq Stocks Such as Netflix and Amd Are Done Rallying

The Nasdaq Composite recently reached an all-time high, marking the culmination of a strong performance among the three major stock indexes in 2024. As investors eagerly await signals from the Federal Reserve to gauge the market's potential for sustained growth, attention has shifted to individual stocks within the Nasdaq, with some facing the possibility of a downward trend.

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Utilizing the CNBC Pro Stock Screener, we conducted an analysis focused on the Nasdaq 100, comprising the 100 largest nonfinancial stocks in the Nasdaq Composite. Our objective was to identify stocks that have experienced at least a 40% increase in value over the past 12 months but are projected to undergo a 1% or more pullback according to consensus analyst price targets within the next year.

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Among the highlighted stocks is the streaming platform giant Netflix, which has seen an impressive 96% surge in the past year. Despite this remarkable growth, analysts anticipate a nearly 7% decline in the company's stock value in the near future. Seaport Research Partners downgraded Netflix in January from a buy to a neutral rating, citing the belief that the stock had reached its fair value.

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Analyst David Joyce expressed this sentiment, stating, "We are downgrading our recommendation on NFLX shares to Neutral from Buy, having rapidly achieved our recently-increased $576 PT. Various valuation metrics relative to growth expectations through 2027 appear to be rather full."

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Another candidate for a potential sell-off is semiconductor manufacturer Advanced Micro Devices (AMD). Despite experiencing a substantial 150% increase in the past year, average analyst estimates suggest a 7% potential downturn. Raymond James downgraded AMD from a strong buy to an outperform rating in January, emphasizing elevated expectations for artificial intelligence (AI) revenue. Analyst Srini Pajjuri's price target of $195 implies nearly a 4% decrease from the previous Friday's closing price.

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Northland Capital Markets echoed similar concerns when downgrading AMD to a market perform rating from outperform in January. Analyst Gus Richard remarked, "Expectations for AI growth are irrational exuberance in our view. AI is big, it’s really big, just not as big as investors are thinking."

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Additional stocks on the watchlist include food delivery service DoorDash, which has experienced a robust 35% gain in 2024 but faces a potential 3% decline according to analyst consensus price targets. Big-box retailer Costco also emerged as a candidate for a sell-off, with analysts projecting a 5% slide in its shares.

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As the market dynamics continue to evolve, investors are closely monitoring these high-performing stocks within the Nasdaq, acknowledging the possibility of a shift in their upward trajectory. The interplay of factors such as valuation metrics, growth expectations, and analyst assessments underscores the complexity of predicting the future movements of these stocks and the broader market.

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