In the current earnings season, technology giants are showcasing their performance, influencing the market trends. Alphabet (GOOGL) reported impressive results in the second quarter, particularly in its Search and Cloud businesses. However, there was a slowdown in growth for YouTube advertising revenue, falling short of analysts’ expectations. Despite this, BMO Capital analyst Brian Pitz reiterated a buy rating for GOOGL stock with a target price of $222. Pitz highlighted the artificial intelligence benefits to Alphabet’s Search business and raised estimates for the Cloud business, reflecting AI-led gains. With over 2 million developers utilizing the company’s AI infrastructure and generative AI solutions, Alphabet is expected to see significant revenue generation in the coming years. While YouTube’s Q2 revenue missed estimates, Pitz remains optimistic, expecting the platform to capitalize on the shift from traditional to digital advertising. Pitz is ranked No. 189 among more than 8,900 analysts tracked by TipRanks, with a success rate of 74%.
ServiceNow (NOW)
ServiceNow (NOW), a cloud-based software company, presented strong results in the second quarter, exceeding investors’ expectations. With better-than-expected net new annual contract value and generative AI contributions, the company raised its 2024 subscription revenue outlook. In response to this performance, Goldman Sachs analyst Kash Rangan increased NOW’s price target to $940 from $910 and maintained a buy rating. Shares surged 13% post-earnings, signaling investors’ confidence in ServiceNow’s GTM execution and platform quality. Rangan emphasized the growth in ServiceNow’s current remaining performance obligation and its adaptability across enterprises. The analyst foresees continued growth at a rate exceeding 20%, driven by AI momentum and an accelerating backlog. Rangan ranks No. 579 among analysts tracked by TipRanks, with a 57% success rate.
Travel + Leisure (TNL)
Travel + Leisure (TNL), a membership and leisure travel company, surpassed analysts’ earnings projections in the second quarter but missed revenue estimates. The company raised its full-year adjusted EBITDA guidance, reflecting strong consumer demand for vacation ownership. Tigress Financial analyst Ivan Feinseth reiterated a buy rating on TNL stock and raised the price target to $58 from $54. Feinseth expects TNL to benefit from lower interest rates and additional rate cuts in 2025, driving revenue and cash flows. The strategic partnership with Sports Illustrated Resorts and the launch of the Ultimate Sports-Themed and Active Lifestyle Resort Network are significant growth drivers for TNL. Feinseth anticipates technology investments, marketing partnerships, and acquisitions to further boost the company. Ranked No. 235 by TipRanks, Feinseth boasts a success rate of 60% in his ratings.
It’s essential for investors to not solely rely on quarterly results but to consider expert recommendations from top analysts. These three stock picks – Alphabet, ServiceNow, and Travel + Leisure – are favored by Wall Street professionals for their strong long-term growth potential. As investors navigate the market amid earnings season, insights from seasoned analysts can guide them toward promising investment opportunities.