Uncertainty was a key theme last week as the summer rally seemed to run out of steam.
As tempting as it is to follow the daily movements of the market, investors would be better served to think long-term and choose their stocks accordingly.
Here are five stocks picked by top Wall Street pros, according to TipRanks, a platform that ranks analysts based on their performance.
Computer technology company IonQ (IONQ) rose significantly during the second quarter of this year, according to a recent research report by Needham analyst Quinn Bolton.
Significant contracts, strengthened full-year guidance and other key developments were completed in the second quarter. (See IonQ Earnings Date & Reports on TipRanks). Earlier this year, IonQ also launched its 32-qubit quantum computer, Aria.
Bolton notes that the company’s strong balance sheet “should allow it to achieve a broad quantum advantage and become a positive cash flow generator without having to raise additional capital.” Given current market conditions and the high cost of borrowing, this is good news.
The analyst also believes that the 32-qubit Aria will help IonQ achieve consistent system scaling and revenue reservations. Further, encouraged by the company’s competitive advantage provided by its approach to trapped ion quantum computing, Bolton believes that IonQ stands to benefit from the growing popularity of the quantum industry and the growing investments being made to drive it. .
Bolton reiterated a buy rating on IonQ with a price target of $9.
Bolton ranks first among more than 8,000 analysts tracked on TipRanks. He was also 73% successful with his grades, generating an average return of 45.2%.
Cyxtera (CYXT) is a provider of data center colocation and interconnection services for service providers, enterprises and government institutions. The company, like most of its peers in the technology sector, has suffered from a difficult macroeconomic environment.
Additionally, in its recent Q2 report, Cyxtera lowered its full-year 2022 guidance after taking into account currency headwinds, macroeconomic setbacks, delays in implementing its new Northern California data center and an unfavorable schedule for certain cost recoveries. (See Cyxtera Blogger Opinions & Sentiment on TipRanks).
However, RBC Capital analyst Jonathan Atkin pointed to a few benefits of the company’s growth, indicating that CYXT stock can be a compelling long-term buy.
According to Atkin, the most important secular growth driver is the growing demand for data and connectivity as new technologies and associated applications begin to roll out. In addition, the analyst also cited “rapid growth in IT outsourcing, data usage, and cloud and hybrid growth as companies achieve their digital transformation goals” as other positive factors.
Although current market conditions and the operating environment prompted Atkin to lower his price target to $14 from $16, he reiterated a buy rating on Cyxtera.
Atkin is currently ranked 11th among approximately 8,000 analysts tracked on the platform. Additionally, 78% of its ratings were profitable, generating an average of 15.8% returns per rating.
Next on our list is the largest microchip maker in the United States, GlobalFoundries (SFP). The company recently beat its second-quarter targets amid fears of slowing demand in consumer-exposed end markets like smartphones and PCs.
Reiterating a buy note, Deutsche Bank analyst Ross Seymore explained that its growing pipeline of long-term deals, focus on expanding its single-source business, unit volume growth profitability and significantly reduced capital risk should boost investor confidence in the stock. (See GlobalFoundries stock investor sentiments on TipRanks).
The analyst also raised the price target to $65 from $60 after attending the Analyst Day event hosted by Global Foundries after the second quarter print. Seymore was encouraged by “the company’s ability to weather a macro/industry downturn while delivering a continued increase in profitability driven by ASP growth, new single-source DWINs, and disciplined cost and expense management.” ‘exploitation’.
Seymore’s track record gives us reason to trust his research and opinion. Ranked 4th among more than 8,000 analysts tracked on TipRanks, the analyst has an 80% success rate on his ratings, generating average returns of 25.9%.
Walmart’s chain of stores (WMT) the recently released quarterly results reflect the resilience that consumers have shown in difficult market conditions. Additionally, operational improvements, continued scaling of alternative revenue streams, and an innovative growth strategy are helping Walmart stay afloat.
After the print, Baird analyst Peter Benedict reinforced a buy rating on WMT stock and kept the price target at $140. (See Walmart Hedge Fund Trading Activity on TipRanks).
Benedict notes that Walmart’s progress in inventory optimization is positive. “Looking forward, the additional pricing actions planned for Q3 should help WMT further adjust inventory levels/mixes to the right size in H2,” the analyst wrote.
Additionally, Benedict also recognized current executives’ efforts to keep Walmart ahead of the rest in the ever-changing retail landscape. “CEO Doug McMillon’s bold strategy to transform WMT into a more agile, fully integrated omnichannel retailer has generated real momentum across the business at a time when many traditional retailers are losing relevance with consumers.” , said the analyst.
Benedict ranks 77th among approximately 8,000 analysts tracked on the platform. Additionally, his ratings were successful 71% of the time, yielding average returns of 16.1%.
Continuing our focus on the retail sector, leading home improvement chain The Home Depot (HD) is another company on Peter Benedict’s shopping list. The company also posted upbeat second-quarter results alongside peer Walmart.
Benedict believes that management’s unchanged outlook for the second half of this year reflects the possibility that the company expects some protection against any significant changes in price-related demands for the remainder of this year. (View Home Depot stock chart, price history and charts on TipRanks).
The analyst is also confident that the company’s strategic investments will bear fruit. “As HD has realized the benefits of many of its strategic investments (in-store front/navigation redesign, merchandising resets, online assortment expansion, faster fulfillment options), momentum should continue to build. while HD leverages its ecosystem of capabilities to deliver a seamless (and more personalized) shopping experience,” Benedict said.
Reiterating a Buy rating on The Home Depot and raising the price target from $335 to $360, Benedict expects the strategic investments made by the company over the past year to strengthen its market leadership position and drive gains in market shares.