Despite the recent turmoil in the stock market due to macro pressures and geopolitical tensions, top Wall Street analysts are still bullish on certain stocks with strong long-term potential. One such stock is membership-only warehouse chain Costco Wholesale (COST). The company recently announced an increase in its membership fee, a move that was well received by analysts. Jefferies analyst Corey Tarlowe reiterated a buy rating on COST stock and raised the price target, highlighting the positive impact of the fee hike on the company’s earnings. Tarlowe pointed out that historically, Costco has increased its membership fees every 5.5 years, on average, but this time, the retailer did so after a seven-year gap. He believes that the timing of the fee hike is opportune, given the company’s consistent membership health and strong sales numbers in June. The analyst expects the higher fee to boost sales and earnings before interest and taxes, as the membership fee is a significant contributor to Costco’s operating profit. He estimates a potential benefit of nearly 3% to the company’s earnings per share over the next two years.
MongoDB (MDB)
Another stock favored by Wall Street analysts is database software company MongoDB (MDB). Despite a stock price decline in May due to weak guidance for the fiscal second quarter, analysts are optimistic about the company’s long-term prospects. Tigress Financial analyst Ivan Feinseth lowered the price target on MDB stock but maintained a buy rating, viewing the sell-off in the stock as a buying opportunity. Feinseth highlighted MongoDB’s growing traction among developers and the increasing momentum for its Atlas DBaaS product. He mentioned the company’s integration of artificial intelligence (AI) capabilities into its offerings, which he believes will drive developer productivity and accelerate enterprise adoption trends. Feinseth also noted MongoDB’s expansion into various verticals like health care, insurance, manufacturing, and automotive production. He is bullish on the company’s solid DBaaS platform, citing its superior functionality and cost advantages over traditional database solutions.
Nvidia (NVDA)
The third top stock pick by Wall Street analysts is semiconductor giant Nvidia (NVDA). The company has been benefiting from the generative artificial intelligence wave, leading to increased demand for its advanced graphics processing units. Despite a significant rally in the stock’s price year-to-date, analysts believe that there is more upside potential. Goldman Sachs analyst Toshiya Hari reiterated a buy rating on NVDA stock and set a price target, citing the sustainability of the ongoing Gen AI spending cycle. Hari’s meeting with Nvidia’s CFO Colette Kress reaffirmed his confidence in the company’s ability to maintain its leadership position through innovation across compute, networking, and software. The analyst highlighted Nvidia’s next-generation AI graphics processor, Blackwell, and expects a substantial revenue contribution from the platform in the coming quarters. Hari is confident in Nvidia’s ability to stay ahead of the competition due to factors like a large installed base and faster adoption of generative AI models by large enterprises and cloud service providers.
Overall, the top stock picks by Wall Street analysts reflect a positive outlook on companies with strong growth potential and innovative offerings. Despite short-term market volatility and uncertainties, these stocks are seen as long-term winners by top analysts in the industry. Investors looking to weather the storm in the stock market may consider adding these top picks to their portfolios for potential returns in the future.