The logo of Nvidia at its corporate headquarters in Santa Clara, California, May 2022.
Nvidia | via Reuters
The macro backdrop is looking challenging as September begins, but analysts have highlighted several stocks that they feel confident about for the long term.
Here are five attractive stocks, according to Wall Street’s top experts, as rated by TipRanks, a platform that ranks analysts based on their past performance.
Nvidia
Let’s start with shares of chip giant Nvidia (NVDA), which are experiencing a phenomenal rise this year as a frenzy around generative artificial intelligence boosts demand for the company’s graphics processing units or GPUs. The company recently reported its fiscal second-quarter results, which crushed Wall Street’s expectations, as revenue more than doubled compared to the prior-year quarter.
JPMorgan analyst Harlan Sur noted that expectations were high, heading into the fiscal second-quarter print. Nvidia’s results and guidance were above expectations, thanks to the strong demand for its data center products. Sur ranks No. TipRanks has more than 8,500 analysts. (See Nvidia Hedge fund Trading Activity on TipRanks).
Marvell Technology
Another semiconductor stock in this week’s list is
Marvell Technology
(
MRVL). (See Nvidia Hedge fund Trading Activity on TipRanks).Marvell TechnologyAnother semiconductor stock in this week’s list is Marvell Technology
(
MRVL
). The company was able to exceed analysts’ expectations in the fiscal second quarter despite revenue declines compared to last year. Management expects sequential revenue growth to accelerate in the fiscal third quarter, fueled by AI and cloud infrastructure.
In reaction to the results, Deutsche Bank analyst Ross Seymore reiterated a buy rating on MRVL stock with a price target of $70. The analyst noted that the company delivered a modest top-line beat and in-line outlook, with solid acceleration in AI-related applications offsetting macro-related weakness.
“Overall, we continue to believe MRVL has a compelling portfolio of infrastructure products that address powerful secular growth trends in AI/Cloud (electo-optics & significant custom compute), 5G and Automotive,” said Seymore.
The analyst thinks that Marvell’s infrastructure products, coupled with an eventual cyclical recovery in the storage, wired and on-premise businesses, would help in significantly accelerating the company’s growth heading into calendar year 2024.Seymore holds the 9th position among more than 8,500 analysts tracked on TipRanks. Seymore’s ratings are profitable 75% of time. Each rating has an average return on investment of 24.2%. (See Marvell Stock Chart on TipRanks)Palo Alto NetworksNext up is cybersecurity provider Palo Alto Networks
(
PANW
), which reported better-than-anticipated fiscal fourth-quarter earnings. Revenue grew 26% year-over-year to $1.95 billion but slightly lagged estimates.
BMO Capital Markets analyst Keith Bachman, who ranks 584th out of over 8,500 analysts on TipRanks, noted that the company’s fiscal 2024 guidance of 19% to 20% year-over-year billings growth and an 37% to 38% adjusted free cash flow (FCF) margin was better than expectations of mid-teens billings growth and a FCF margin in the mid-30% range.[next-generation security annual recurring revenue]Bachman thinks that the trend of consolidating solutions with leading security vendors will continue as the threat landscape evolves and as generative AI emphasizes the need for data aggregation. He added that implementing a consolidated portfolio enhances the prospects for real-time threat detection and remediation.
The analyst highlighted that customers are increasingly adopting each of PANW’s three platforms (Strata, Prisma and Cortex), as they look for integrated solutions and unified data models. He raised his price target from $235 to $275 and reiterated his buy rating for Palo Alto. (See Palo Alto Financial Statements on TipRanks).
Intuit
Financial software company Intuit‘s (INTU) fiscal fourth-quarter results topped analysts’ forecast. That said, the company’s earnings outlook for the first quarter of fiscal 2024 missed expectations while revenue guidance was in line with estimates.
Deutsche Bank analyst Brad Zelnick explained that the company’s strong fiscal fourth-quarter results were driven by the outperformance of its small business unit, supported by solid growth in the QuickBooks Online (QBO) ecosystem.
At the innovation and investor day events scheduled to be held in September, the analyst expects management to reveal more details about Intuit’s AI investments over the past several years and advances in generative AI. He expects the company’s AI initiatives to create value for small business owners, consumers, and taxpayers, driving long-term growth and improved profitability.
Zelnick maintained his buy rating on INTU and increased the price target to $575 from $525, saying, “We see its AI-driven expert platform powering accelerated innovation with leverage, thus enabling sustained mid-teens or better EPS growth. “
Zelnick is ranked 50th among over 8,500 analysts in TipRanks. (See Intuit Insider Trading Activity on TipRanks)
The Chefs’ Warehouse
(CHEF) is a distributor of specialty foods, supplies and ingredients for chefs and restaurants. (See Intuit Insider Trading Activity on TipRanks) The Chefs’ WarehouseWe end this week’s list with
The Chefs’ Warehouse
(
CHEF
), a distributor of specialty foods, supplies and ingredients for chefs and restaurants.
BTIG analyst Peter Saleh pointed out that CHEF stock is trading at or near trough EV/EBITDA and P/E multiples (excluding Covid-era volatility) despite six guidance upgrades over the past 18 months, record sales, gross profit, operating income and EBITDA.01001010The analyst expects the company’s sales to grow 28.5% to $3.36 billion in 2023, backed by about an 8% rise in organic sales, with acquisitions contributing the remaining growth. While his estimate of $2 billion is nearly twice as much revenue in 2019, he argues that shares are still trading at a 25% discount to pre-pandemic prices. Overall, Saleh believes that CHEF shares are massively undervalued and underappreciated by investors.01001010Retaining a buy rating with a price target of $48, Saleh said, “Given the growth profile, including double-digit sales and EBITDA growth, we believe CHEF represents a unique opportunity for long-term investors, and we maintain the stock as our small/mid-cap Top Pick. “01001010Saleh ranks No. TipRanks tracks 402 analysts out of over 8,500. Also, 60% of his predictions have shown a profit with an average return on investment of 11.1%. (See CHEF’s Technical Analysis of TipRanks).01001010