Nvidia Nasdaq: NVDA Not the most upgraded stock at the end of the third-quarter earnings reporting season, ending a trend that had been in place for nearly two years. Although it’s potentially bad news for the market, the reasoning behind this should give investors hope that the stock rally is expanding and that the S&P 500 will maintain its uptrend. NVIDIA, which now ranks 12th on MarketBeat’s list of most upgraded stocks, has been replaced by consumer and corporate names that are well positioned for the second wave of AI. The second wave of AI is the implementation of AI models and applications, a segment of the industry that is expected to grow faster and be larger than the infrastructure, which was the first wave.
Walmart emerges as the most upgraded stock after third-quarter earnings season
Walmart today
(As of 05:45 PM ET)
- 52 week range
- $51.21
▼
$96.18
- Dividend yield
- 0.89%
- P/E ratio
- 38.39
- Price target
- $93.69
Walmart New York Stock Exchange: MT It is the most upgraded stock of the third quarter earnings reporting season. The company has received 38 positive reviews or upgrades over the past 90 days, 16 of which have been since the release of third-quarter results. Activity since release includes one downgrade to Hold, but the $91 price target is in line with the broad consensus in mid-December. The consensus is in line with the market price but rising in 2024 due to the revisions trend, being up 50% for the year and 15% since the Q3 release with most of the new targets above it. The revision trend leads to a new all-time high and the potential for a move to $115 or higher.
The reason is performance Walmart continues to demonstrate its leadership position, outperforming its competitors while capturing market share. Results in 2024 include continued outperformance, strong margin, improved guidance, and sufficient cash flow to deliver strong capital returns. Return of capital includes dividends and stock repurchases that offset stock-based compensation and increasingly reduces the number compared to the previous year. The outlook for 2025 is continued growth, cash flow trends and capital return. Among the catalysts for the stock price is the failed Kroger merger New York Stock Exchange: K.R And Albertsons New York Stock Exchange: ACIwhich leaves Walmart’s grocery business untouched and safely behind its moat.
Definition pads: Moves up to second position
Meta platforms today
(As of 05:45 PM ET)
- 52 week range
- $340.01
▼
$638.40
- Dividend yield
- 0.33%
- P/E ratio
- 28.13
- Price target
- $638.00
Meta platforms Nasdaq: Meta It’s not a newcomer to the list of most upgraded stocks but it has moved into second place. The stock received 37 positive reviews during the quarter, 19 after the third-quarter release. Highlights from the third-quarter release include better-than-expected 19% growth in gross profit and enhanced bottom-line gains with the help of AI.
AI is helping drive engagement and monetize traffic across the Meta Platforms suite of applications, including Facebook, and its impact is expected to grow. The only bad news from the report is that spending on AI is expected to rise in 2025, but is offset by the long-term gains the investment is expected to bring. Meta is also deepening its partnership with Oracle, using the Oracle Cloud to train its Llama AI models as Oracle integrates them into its services.
Analysts rate Meta Platforms a Moderate Buy and see it slightly ahead at the consensus. However, the agreed target is rising in 2024, by almost 100%, and the revision trend remains positive. Recent targets lead to the high range near $800, nearly 30% upside from mid-December price points.
Salesforce: A force to be reckoned with
Salesforce today
(As of 05:45 PM ET)
- 52 week range
- $212.00
▼
$369.00
- Dividend yield
- 0.47%
- P/E ratio
- 55.47
- Price target
- $378.86
Sales force New York Stock Exchange: Customer Relationship Management It is among the top AI services companies today. The company has used data mining and machine learning since its inception and has consolidated its leadership position. Today, Salesforce is the #1 platform for integrated customer relationship management (CRM) services, allowing businesses to create, store, track and use their data while improving efficiency and keeping customers happy.
Q3 highlights include mixed results compared to consensus expectations. However, expectations were raised, and sustained growth, strengthened bottom lines, cash flows, strong balance sheet, and returns of capital helped offset weaker-than-expected earnings. Salesforce buys stock and now pays a dividend. The company joined the ranks of dividend aristocrats and began distributing tokens early in the year. The payout is about 12% of earnings, leaving plenty of room for annual increases, which could reach the double-digit range due to earnings growth.
As far as analysts are concerned, Salesforce stock received 37 positive reviews in the fourth quarter, and 22 since the third quarter results were released. The implicitly agreed target implies a low single-digit increase from $355, but is rising, by more than 50% last year and 15% in December, with a review leading to higher levels. The high-end range puts this market near $450 in 2025, which represents another 30% upside.
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