The world of finance is witnessing a remarkable shift, primarily fueled by advancements in artificial intelligence (AI). In 2024, this optimism around AI technologies has driven significant performance in the S&P 500 index, particularly benefiting sectors such as semiconductor production and utilities. For investors aiming to reap sustainable returns from the market, the focus should shift toward companies with robust long-term growth trajectories. Esteemed Wall Street experts, leveraging their analytical prowess, can illuminate the pivotal catalysts that might sustain a company’s growth, aiding investors in selecting stocks poised for profitable outcomes. Below, we explore three stocks that are currently capturing the attention of top analysts according to insights from TipRanks, a platform dedicated to tracking analyst performance.
Kicking off our analysis is Fortinet (FTNT), a frontrunner in cybersecurity solutions. The company has set its sights on becoming a dominant player in the secure access service edge (SASE) arena by utilizing machine learning and other AI technologies. TD Cowen’s analyst Shaul Eyal recently reiterated a buy recommendation on Fortinet, revising the price target upward from $75 to $90. Eyal’s positive outlook stems from extensive discussions with industry insiders and channel checks indicating a steady recovery within Fortinet’s business framework alongside strong demand for its diverse product line.
Notably, for the upcoming third quarter, there are indications that revenues and billings may hit the high end of Fortinet’s forecasts. Eyal also expresses optimism for a 12% revenue growth in the fourth quarter of the fiscal year, underpinning this assertion with observations of solid closure rates and a strengthening sales pipeline. A critical component of Fortinet’s resurgence is its operational technology offerings, which are benefitting from a prolonged replacement cycle replacing outdated systems. Moreover, the recent acquisition of Lacework positions Fortinet favorably within the expanding realm of cloud security, which continues to gain traction amidst an AI-driven landscape.
Next on the list is GitLab (GTLB), a cloud-based, AI-centric software platform that enhances developer productivity while streamlining operational efficiency. Mizuho analyst Gregg Moskowitz has reiterated his buy rating for GitLab, alongside a price target of $62. Moskowitz’s confidence emanates from productive engagements with GitLab’s management, who express enthusiasm about capturing a larger share of the substantial $40 billion addressable market.
Currently, GitLab and its primary competitor, Microsoft’s GitHub, control a modest 5% of the software development lifecycle market. However, GitLab’s momentum is projected to accelerate, particularly with its Duo Pro product expected to thrive thanks to the generative AI trend. The management’s optimistic outlook regarding its GitLab Dedicated offering, which is experiencing unexpectedly high customer interest, suggests considerable upside potential. Moskowitz is optimistic about GitLab’s mid- to long-term growth prospects, attributing this to the possibility of seat expansion, price hikes, and upsell opportunities, making it a compelling candidate for investors focused on tech-oriented growth.
Lastly, we examine Nvidia (NVDA), a semiconductor titan that has witnessed impressive revenue growth thanks to escalating demand for its advanced graphics processing units (GPUs) used in AI applications. Following a recent investor meeting, Goldman Sachs analyst Toshiya Hari has maintained a buy recommendation for Nvidia, raising the stock’s price target from $135 to $150. Hari’s bullish stance reflects a deeper understanding of Nvidia’s competitive edge, particularly with the growing complexity in inference workloads, which is crucial for future compute requirements.
Nvidia’s management remains optimistic about continued investments in accelerated computing and GPU technology from data center operators, spurred by the surging generative AI trend. Additionally, the prospects around Nvidia’s upcoming Blackwell platform are highlighted as pivotal for both imminent and longer-term revenue opportunities, solidifying the company’s competitive advantage. Given ongoing industry developments and robust ordering trends observed among major players like Dell and Hewlett Packard Enterprise, Hari has adjusted revenue projections for the fiscal years 2025-2027 upward, further corroborating Nvidia’s promising investment appeal.
The convergence of AI and market performance is unequivocally reshaping investment strategies. As optimism regarding AI continues to bolster key sectors, looking at stocks like Fortinet, GitLab, and Nvidia presents intriguing opportunities for proactive investors. These companies are not just riding the AI wave; they are strategically positioning themselves as pivotal players in their respective markets. Thus, for those seeking sustainable, long-term growth investments, aligning with the insights from esteemed analysts can be a decisive step toward realizing fruitful financial returns in this evolving landscape.