Wall Street analysts are bullish on Alphabet & Microsoft
One man passes the Alphabet Inc.’s brand logo outside of its Beijing office, China on August 8, 2018, 2018.
Thomas Peter | Reuters
The markets can be more volatile during the earnings season. it’s showing no sign of slowing down.
Short-term wagers are dangerous in turbulent times. To better weather the storm, investors should look at long-term perspectives.
Some of Wall Street’s top pros have tuned out the noise and picked out five stocks as ideal long-term investments, according to TipRanks, which tracks the best-performing analysts.
These are the five companies analysts believe will do well in future, despite current macro challenges.
Snap (SNAPIt is the social media platform behind Snapchat’s photo-sharing app. Snapchat has more than 335 million active daily users. It recently reported results for the first quarterAccording to Evan Spiegel, CEO, it was a challenging period in the company’s history. (See Snap Hedge Funds HoldingsTipRanks
Brian FitzgeraldWells Fargo Securities thinks that SnapThere are bright futures ahead. In a recent report, the analyst noted continuing growth in Snap’s audience, engagement, and monetization. As the macro environment becomes more favorable, he sees growth continuing to accelerate.
Fitzgerald gave the stock a Buy rating with a Price Target of $48.
According to the analyst, Snap’Its Conversions API, privacy-safe tools, and other features are helping to increase the return on advertising investment. This is what makes Snap stand out from its competitors. Additionally, Fitzgerald observed that Snap is managing its content and infrastructure costs well, explaining that those are some of the fruits of the Snapchat parent’s cloud computing deals with Amazon (AMZNGoogle (GOOGL).
Fitzgerald is No. TipRanks ranks Fitzgerald at No.78 among nearly 8,000 analysts. The analyst’s stock ratings have been correct 60% of the time, with an average return of 23.7% per rating.
MicrosoftMSFT) reported strong quarterly resultsThis is due to solid cloud computing performance. Windows software manufacturer gave an encouraging outlook for this quarter and next fiscal year. It expects that its cloud computing business will perform well. (See Microsoft News SentimentTipRanks
Wedbush’s Dan IvesWe agree with that Microsoft’sCloud business will shine. In a recent report, the analyst pointed out that the company is expecting to report cloud revenue of as much as $21.35 billion in the current quarter, compared to Wall Street’s consensus estimate of $20.89 billion.
Ives has rated this stock as a buy, with a $340 price target.
Microsoft’s cloud services and other providers help businesses modernize their systems to make them more efficient. Ives predicts that companies will invest in digital transformation even if the Federal Reserve raises rates and inflation issues slow down the economy. Cloud spending will only accelerate and Microsoft is well-positioned to capitalize on it. Further, the analyst noted that Microsoft’s other businesses are also doing well.
Ives ranks No. 1 out of nearly 8,000 TipRanks analysts. 119. The analyst’s stock ratings have been accurate 61% of the time, with an average return of 21.6% per rating.
Alphabet’s (GOOGAfter the company reported quarterly resultsThis showed lower than expected YouTube advertising revenue growth. This is the GoogleYouTube, which is a key asset in the YouTube business, generates most of parent’s revenue through advertising. (See Alphabet Blogger SentimentTipRanks
Investors should be concerned about YouTube’s slowdown, but Raymond James analysts are more worried. Aaron KesslerGOOGL shares are a favorite of his. First, Alphabet’s management explained that the issue with YouTube was the direct response ad type, which faced a tough comparison with the same quarter the previous year. But, Alphabet believes that the direct response segment still has great potential.
Kessler assigned the stock as a buy and set a $3,180 price target.
Even though Google’s war in Ukraine could be impacting European ad spending, the analyst still sees long-term potential for Google Search. In a recent report, he pointed out that retail and travel recovery will continue to drive gains in Google’s search business. Kessler stated that YouTube Shorts’ strong user engagement growth is encouraging. YouTube Shorts is viewed more than 30 million times per day.
Kessler observed, too that Alphabet is seeing a bright spot in the cloud business. He noted that this business is showing great momentum. According to the analyst, Alphabet’s Other Bets, which include self-driving unit Waymo, also have a promising future.
Alphabet’s $70 billion boost to its share repurchase program also caught Kessler’s attention. According to Kessler, this new plan will be in addition the approximately $4 billion that was left under the previous share repurchase program.
Kessler ranks No. From nearly 8,000 analysts, Kessler ranks No.88 in the TipRanks Database. With an average return on investment of 19%, his stock ratings were correct 65 percent of the times.
Visa payment network (VThe company reported solid financial results for the second quarter of fiscal 2018, despite the loss from suspending its operations in Russia. While Visa estimates that Russia will shave 4% from its fiscal second-half net revenue, overall the company is doing well. According to the management, growth in other areas will compensate for lost Russian revenues within one year. (See Visa Hedge Funds HoldingsTipRanks
An analyst at Wedbush Moshe Katri agrees that Visa’s business can continue booming despite the Russian headwind. With a $270 price target, the analyst gave Visa stock a Buy rating.
Global travel recovery is an opportunity for boon Visa. In a recent report, Katri highlighted that Visa’s cross-border travel volumes were improving, adding that this was a high-margin business for the company. Katri also pointed out that while many businesses may feel the effects of inflation, it is actually an advantage for Visa due to its high average ticket price.
The management also explained that Visa is pleased to see that the affluent have returned to spending in entertainment, travel and meals. Affluent customers were prevented from buying during the pandemic, as they couldn’t go outside. But now these people can spend more because vaccines are available to give them greater confidence.
Katri ranks No.1 among the nearly 8,000 TipRanks Analysts. 335. The analyst’s stock ratings have been successful 72% of the time, with an average return of 16.8% per rating.
Juniper Networks (JNPR() is a manufacturer of networking products, and offers cybersecurity solutions. The company’s quarterly revenue forecast was higher than expected, but the JNPR stock fell after management reduced the full-year 2022 gross margin outlook. (See Juniper Networks Retail InvestorsTipRanks
But, Needham analysts Alex HendersonAccording to a report, the issue of gross margin adjustment was minor. The analyst said that Juniper’s underlying fundamentals look strong and that the management’s execution is also likely to look better than those of comparable companies.
Investors are concerned by the supply disruption caused by lockdowns in China due to Covid-19’s resurgence. Although this may seem to be a concern, Henderson stated that Juniper is more dependent than ever on China.
Henderson assigned the stock as a buy and set a $38 price target.
Further, the analyst pointed out that Juniper’s $730 million software business is on track to more than double over the next three years. The momentum in the software division is also driving gains in the company’s other businesses, such as switching, routing, and security.
Finally, Henderson said that Juniper’s acquisitions of Mist, Apstra, 128 Technology, and Netrounds should help accelerate growth across the company’s portfolio.
Henderson ranks No. TipRanks ranks Henderson as No. 71 of nearly 8,000 analysts. Stock ratings of his have been correct 59% of time with an average return per rating at 23.7%.