The Netflix logo appears on their desk in Hollywood, California.
Lucy Nicholson | Reuters
Stocks started the new year in full swing as investors faced the prospect of higher omicron cases, higher bond yields and the Federal Reserve tightening its monetary policy.
These macroeconomic factors can cause confusion even for seasoned investors, especially as they position their portfolios for the long term. TipRanks, a financial aggregator site, provides a range of tools for investors to look beyond short-term market volatility.
Here are five stocks with strong long-term potential that Wall Street analysts love.
After the boom of e-commerce and the rapid acceleration of high-tech applications for almost all industries, the demand for specialized semiconductors has increased. The vast majority of 5nm chips used in chip manufacturing were developed in foundries in East Asia, although Intel (INTC) is trying to fill the household void. Led by CEO Pat Gelsinger, the company has pledged $25 billion to $28 billion in investments toward new foundries and several new initiatives, analysts have noted.
Among those analysts is Evan Fence, who recently explained a host of reasons for his bullish stance. In addition to the massive expansion in footprint and production capacity, Intel has announced that it will take General Mobileye for advanced driver assistance systems, which it believes will catalyze INTC’s upward momentum. (See Intel stock analysis on TipRanks)
Feinseth classified the stock as a buy, raising its target price to $72 from $68.
According to the analyst, Mobileye’s IPO “unlocks the tremendous value potential for shareholders, provides additional capital for continued investment in key growth initiatives, and strengthens corporate partnerships in the continued development of AV technology.” The initial public offering is expected sometime during the summer of 2022.
In terms of additional initiatives, Intel will join its virtual competition to develop more advanced semiconductors. Furthermore, the recently announced Intel Foundry Services (IFS) will provide cutting-edge expertise to other companies’ manufacturing process.
Feinseth indicated that he expects Intel to regain its previously dominant position in the data center and cloud infrastructure markets.
On TipRanks, Feinseth is ranked #50 out of over 7,000 overall analysts. His stock picks were correct 74% of the time and brought him back an average of 37.3% each.
However, another industry buoyed by stay-at-home trends due to the pandemic, educational technology has seen ratings of many companies reach high levels as their user bases swell. However, as vaccine rollouts have progressed, investor interest has shifted away from reopening associated plays. One such stock is Coursera (Tennis Court), which has seen its valuation drop by about 45% since it went public in early 2021. Now, a senior analyst sees a worthwhile discounting opportunity.
Ryan MacDonald of Needham & Co. announced. A bullish report on the stock after announcing Coursera as one of its educational technology company’s top picks for the new year. In it, he argues that its core business is well poised for a high performance this year. (See Coursera Insider trading activity on TipRanks)
McDonald ranked the stock as a buy, and set a target price of $45.
The analyst expects that the company’s increased budgets to retain talent will provide its corporate sector with the ability to continue to grow. Furthermore, Coursera has invested heavily in expanding its product offerings. The company has added software like LevelSets, SkillSets, and Academies, all of the tools that MacDonald expects will cement the company better with its customers.
On top of that, COUR is adding more content to its grading platform, jumping from 24 to 35 live programs.
The stock itself has been under major pressure since its March 2021 IPO when edtech companies guaranteed premium valuations, and now the analyst sees its stock price at an attractive entry point.
Among the more than 7,000 analysts, MacDonald is ranked #439. It has a 52% success rate, and an average success rate of 30.6% for each.
The world’s most valuable company by market capitalization briefly passed another milestone recently, a $3 trillion valuation. Following its massive production cycle led by the iPhone 13, Apple (AAPL) is experiencing massive demand, and record sales have been executed. All this, in the face of the global semiconductor shortage that mainly affects smartphone manufacturers.
Dan Ives of Wedbush Securities reiterates his confident stance on the stock, which has seen that as shortages in chips and components begin to ease through 2022, a smoother supply chain will act as an upward catalyst for Apple. In addition, he was bullish about service sector expansion, as well as pipeline product innovations on the way. (See Apple website traffic on TipRanks)
Ives rated the stock as a buy, and set a target price of $200.
The analyst explained that consumer demand is on course to exceed supply by 12 million units, and that Apple already sold over 40 million units in the last shopping season.
As far as its services business is concerned, Ives anticipates an addressable market of approximately $1.5 trillion. Huge opportunities for monetization exist with Apple’s “Proven Gold Base”, and it’s already ready to meet $100 billion by 2024.
In addition to the iPhone and traditional product cycles, Apple has already announced a potential vehicle offering targeted for 2025, which could open the company to seizing market share from more emerging electric vehicle operators. Ives also explained that “the highly anticipated augmented reality glasses” will arrive in the back half of the year, providing Apple with exposure to the revenue streams associated with metaverses.
Financial data aggregator Ives is ranked #60 out of more than 7,000 professional analysts. Its reviews have been met with success 74% of the time, and it has generated average returns of 51.8%.
In a digitally transformed world, everyone needs a website. However, the publicly traded domain registrar GoDaddy (Jedi) has experienced relative stagnation over the past year and a half, until recently. Activist investor Starboard Value took 6.5% of the shares, noted that the shares were discounted and “represented an attractive investment opportunity,” according to its filing.
Revealing his hypothesis on the matter is Brent Thill of Jefferies, who shared bullish sentiment with Starboard, writing that GoDaddy represents a “high value game among website builders.” Unlike many other tech plays, GDDY underperformed the S&P 500 (SPX) and the Nasdaq Composite (NDX), however, the analyst sees this as just another reason to buy. (See GoDaddy risk analysis on TipRanks)
Thill classified the stock as a buy, and set a target price of $110.
He said GDDY is loved for its “consistent execution, double-digit organic revenue growth, strong UFCF generation and attractive valuation.” Thill maintains his optimism even after shares jumped more than 8% after news of the acquisition.
Furthermore, GoDaddy’s investment in innovation throughout 2021 is expected to be a tailwind as 2022 progresses.
A relatively new CEO for two years has focused the company on launching product innovations, particularly in hosting, presence, payment, and “omnichannel commerce solutions.”
Thill is rated #314 out of over 7,000 expert analysts. It has been successful 60% of the time and has average returns of 28.2%.
As the streaming wars rage, Netflix (NFLX) Cooling stock. The past two months have been rather weak for the streaming service and production company, as investors were shaken by poor participation data and concerns about its international profitability. However, the majority of analysts remained optimistic.
One of them is Scott Devitt of Stifel Nicholas, who writes that despite investor concerns, the company has released popular content well, and has a strong pipeline that will see the company move away from its exposure to video-only product offerings. (See Netflix Hedge Fund trading activity on TipRanks)
Devitt classified the stock as a buy, and announced a price target of $660.
The analyst explained that unlike its traditional video content streaming business, Netflix has been innovating toward video games and visual effects opportunities. The company hopes to diversify its revenue sources and differentiate itself from other streaming entities.
Meanwhile, he maintains a confident long-term outlook on NFLX. From Devitt’s calculations, the company will increase total number of subscribers by 50% by 2025 and by 100% by 2030.
In addition to the participation data numbers and international reach skepticism, Devitt attributes the recent decline in the stock price to rotation away from growth and technology stocks, as well as “increased investor focus on the influx of new competition/the benefit of alternatives.” Although he does not care about the basic fundamentals of the Netflix business.
For his efforts, Devitt currently holds a ranking of #177 out of over 7,000 analysts vying for the top spots. Its reviews are a hit 62% of the time and it has an average return of 35.3%.