The stock market is currently witnessing an optimistic surge, primarily driven by advancements in artificial intelligence (AI). The S&P 500 has seen a notable uptick in 2024, with significant contributions from tech-heavy sectors such as semiconductor and utilities. For investors, this presents an opportune moment to identify companies with strong growth trajectories capable of delivering sustainable returns. By leveraging insights from seasoned Wall Street analysts, investors can uncover pivotal factors that facilitate long-term success. Below, we explore three stock selections recommended by industry experts based on their promising growth potential and recent market performance.
Fortinet (FTNT): Leading in Cybersecurity
Fortinet, a prominent player in the cybersecurity landscape, aims to solidify its position in the secure access service edge sector. The company’s innovative use of machine learning and AI ensures it stays ahead in providing robust cybersecurity solutions. Recent assessments by TD Cowen analyst Shaul Eyal reveal a bullish outlook for Fortinet, affirming a buy rating with an increased price target, now set at $90 up from $75. Eyal’s analysis indicates a positive trajectory for Fortinet, underscored by indications of a recovery in business activity and sustained demand across its extensive product lineup.
Channel checks suggest that Fortinet’s third-quarter revenues are set to reach the high end of the company’s projected outlook, hinting at potential upward revisions in estimates. Eyal’s confidence for a 12% revenue growth in Q4 2024 stems from promising closure rates and project pipelines into the traditionally strong fourth quarter. Notably, Fortinet’s growth is also being fueled by the rising adoption of AI-driven network solutions and the company’s strategic focus on enhancing cloud security—factors which have been bolstered further through their recent acquisition of Lacework. Eyal’s strong performance, ranking as the 12th best out of over 9,100 analysts, demonstrates his adept ability to pick winning stocks, with a historical profitability rate of 71%.
Another promising prospect is GitLab, an enterprise-focused SaaS firm that enhances developer productivity while simultaneously minimizing security risks. Mizuho analyst Gregg Moskowitz recently reaffirmed a buy rating on GitLab, setting a price target of $62. His confidence is rooted in discussions with management, which revealed substantial optimism about capturing a greater market share in the burgeoning $40 billion addressable market. Currently, GitLab, in conjunction with Microsoft’s GitHub, holds a mere 5% share of the software development life cycle market.
Moskowitz particularly highlighted the anticipated momentum for GitLab’s Duo Pro product in 2025, expected to benefit from a broader generative AI trend, as businesses increasingly move towards intelligent automation. Additionally, management’s forecast regarding the GitLab Dedicated service shows robust customer interest, further indicating a positive outlook on average revenue per user. With key growth levers including seat expansion, pricing strategies, and upselling, GitLab demonstrates a solid growth potential in the medium-to-long term. While Moskowitz is ranked 321st among analysts tracked by TipRanks and boasts a 58% success rate in recommendations, his insights merit attention for those seeking investment opportunities in tech.
Finally, no discussion of tech stocks is complete without mentioning Nvidia, a titan in the semiconductor industry renowned for its cutting-edge GPUs. The company has experienced extraordinary revenue growth, primarily driven by rising demands for GPUs to support AI model development and applications. Following a recent investor meeting, Goldman Sachs analyst Toshiya Hari expressed renewed optimism in Nvidia, reiterating a buy rating and adjusting the price target upwards to $150 from $135.
Hari’s bullish stance is bolstered by a growing understanding of Nvidia’s competitive advantages, particularly in light of anticipated increases in inference workload complexities which could further drive compute demand. Increased spending from data centers on accelerated computing systems, combined with prospects linked to Nvidia’s Blackwell platform, positions the company well for both near-term and sustained revenue growth. With a ranking of 32 among analysts tracked by TipRanks and a successful rating record of 68%, Hari’s insights on Nvidia present a compelling rationale for investors seeking exposure to AI and its enabling technologies.
The current market landscape signals a prime opportunity for investors keen on capitalizing on the proliferation of artificial intelligence. With Fortinet, GitLab, and Nvidia emerging as key players poised for growth, these companies exemplify the potential driven by technological advancements. By staying informed and utilizing expert analysis, investors can make informed decisions that leverage the dynamism of AI-driven markets and foster sustained growth in their investment portfolios.