These Three Stocks Have Good Growth Prospects, According to Wall Street Analysts

The year has just begun, but macroeconomic uncertainties are already weighing on investors. Concerns about inflation and its impact on the Federal Reserve's interest rate policies have heightened the challenge of navigating the market. Amid such volatility, selecting stocks with strong financial fundamentals and significant growth potential can help enhance portfolio returns. Insights from leading Wall Street analysts, who combine macroeconomic understanding with company-specific evaluations, can provide valuable guidance.

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Here are three stocks that top analysts currently favor, according to TipRanks, a platform that evaluates analysts based on performance.

‍Uber Technologies (UBER)

Uber Technologies, a leader in ride-sharing and food delivery services, stands out as a promising investment. Despite posting lower-than-expected gross bookings for the third quarter of 2024, the company exceeded revenue and earnings expectations, demonstrating resilience in challenging times.

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Mizuho analyst James Lee recently reiterated a "buy" rating for Uber with a price target of $90. He views 2025 as a pivotal year for the company, marked by strategic investments designed to fuel long-term growth. While these initiatives may temporarily impact earnings before interest, taxes, depreciation, and amortization (EBITDA), Lee expects them to significantly boost the company’s trajectory.

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Lee forecasts a compound annual growth rate (CAGR) of 16% for Uber’s core gross bookings from fiscal year 2023 to 2026, aligning with the company’s analyst-day goal of mid-to-high teens growth. Additionally, he predicts Uber’s EBITDA will grow at a CAGR of 40%, reflecting economies of scale and improved operational efficiencies that should offset potential margin risks.

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Concerns about Uber’s Mobility segment have been overstated, according to Lee. He projects gross bookings growth in the high teens for fiscal year 2025, with a slower rate of deceleration compared to the latter half of 2024. For Uber’s Delivery business, mid-teen growth is anticipated, driven by expanding new verticals and maintaining a strong market share in food delivery.

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Notably, grocery adoption in markets like the U.S., Canada, and Mexico remains robust. Lee ranks among the top 4% of analysts tracked by TipRanks, with a 60% success rate and an average return of 12.9%.

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Datadog (DDOG)

Datadog, a cloud monitoring and security solutions provider, continues to impress with its ability to adapt to market trends. The company’s better-than-expected third-quarter 2024 results underline its resilience in a competitive industry.

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Monness analyst Brian White remains bullish on Datadog, reaffirming a "buy" rating and setting a price target of $155. White commends the company’s balanced approach to the generative artificial intelligence (AI) trend, avoiding exaggerated claims while maintaining transparency. He notes that AI-native customers contributed over 6% to Datadog’s annual recurring revenue in the third quarter of 2024, up from 4% in the previous quarter.

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Datadog’s AI-driven offerings, such as LLM Observability and its generative AI assistant Bits AI, exemplify its innovative edge. White highlights the company’s cloud-native platform and strong position in the observability space as key factors justifying a premium valuation. He anticipates increased activity in the AI sector over the next 12 to 18 months, bolstered by generative AI’s long-term growth potential.

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Ranking in the top 1% of analysts tracked by TipRanks, White boasts a 69% success rate and an average return of 20%.

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Nvidia (NVDA)

Nvidia continues to dominate the semiconductor space, benefiting from soaring demand for its advanced GPUs, which are integral to AI model development. The company’s strategic focus on generative AI positions it as a standout player in the tech industry.

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JPMorgan analyst Harlan Sur recently reaffirmed his "buy" rating for Nvidia with a price target of $170. Following discussions with CFO Colette Kress, Sur highlighted the company’s successful ramp-up of its Blackwell platform despite supply chain challenges. Nvidia remains optimistic about strong data center spending in 2025, supported by the Blackwell rollout and robust demand across sectors.

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Sur also emphasized Nvidia’s potential to capture a significant portion of the $1 trillion data center infrastructure market. The company’s competitive advantages, including ease of adoption and comprehensive system solutions, make it a preferred choice over application-specific integrated circuit (ASIC) alternatives. Additionally, Nvidia is exploring opportunities beyond high-end gaming, such as next-generation gaming products and AI-powered PCs.

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Sur ranks among the top 1% of analysts on TipRanks, with a 67% success rate and an average return of 26.9%.

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Amid economic uncertainties, companies like Uber, Datadog, and Nvidia stand out for their robust financials, innovative strategies, and long-term growth prospects. Analysts remain optimistic about their ability to navigate challenges and capitalize on emerging trends, making them compelling picks for investors looking to build resilient portfolios in 2025.

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