Top Wall Street analysts favor these 3 stocks for solid upside
Concerns over lofty valuations of artificial intelligence (AI) stocks and the dubious outlook for a December rate cut have weighed on investor sentiment in recent trading sessions. But for now NvidiaIts solid earnings last week appeared to undermine the idea that anything tied to AI investing is in a bubble.
Investors who want to benefit from the recent sell-off and buy attractive stocks in the long term can follow the advice of top Wall Street analysts. These experts can help provide important insight into a company’s growth potential.
Here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Microsoft
Windows and Xbox owner Microsoft (MSFT) is seen as one of the biggest beneficiaries of the AI boom. Last month, the company reported better-than-expected results in its fiscal first quarter, with revenue from its Azure cloud business rising 40%.
Recently, Baird analyst William Power issued a buy rating and a price target $600. TipRanks’ AI Analyst is also bullish on MSFT, giving it an “outperform” rating and a $628 price target.
Power explained his optimism: “With the help of the OpenAI relationship, Microsoft is leading the AI revolution with infrastructure and applications, providing an end-to-end AI platform for both businesses and consumers.”
Power sees MSFT’s partnership with ChatGPT parent OpenAI as a key differentiator that helps it run AI at scale and quickly. The 5-star analyst said that after committing to invest $13 billion, Microsoft recently announced that it would increase its investment in Azure to $250 billion in a few years.
The analyst talked about the impressive growth in MSFT’s total revenue and Azure business in the September quarter; cloud business currently accounts for 60% of overall revenue. Power also highlighted the power of Microsoft’s core applications such as Microsoft 365, LinkedIn and Dynamics. He noted that MSFT’s revenue growth in the first quarter of FY26 was accompanied by a solid operating margin of 49% and a free cash flow margin of 33%. He said Microsoft’s strong margins are driving continued double-digit EPS growth.
Power believes in Microsoft’s near- and long-term potential despite immediate pressures from AI capex concerns.
Power is ranked #287 out of more than 10,100 analysts followed by TipRanks. It did well in the ratings 57% of the time and delivered an average return of 17%. See Microsoft Ownership Structure on TipRanks.
Reservation Holdings
Online travel agency (OTA) Reservation Holdings (BKNG) is another pick of this week. The owner of Priceline and Kayak announced impressive third-quarter results, with double-digit increases in gross bookings and revenue.
Impressed by third-quarter performance and attractive valuation, Wedbush analyst Scott Devitt upgraded BKNG to buy from hold. price target $6,000. By comparison, TipRanks’ AI Analyst has a “neutral” rating on Booking Holdings with a $5,406 price target.
“Booking remains the best-positioned OTA in our view,” Devitt said, benefiting from a host of positives, from the company’s scale and diversification to solid liquidity and free cash flow conversion.
The top-rated analyst also noted management’s impressive track record of successfully executing major strategic initiatives. Devitt emphasized that Booking Holdings has increased its market share in alternative accommodation, while also optimizing costs and increasing efficiency. He said the company’s cost savings support reinvestment in growth initiatives to achieve long-term goals.
Additionally, Devitt described Booking’s impressive growth in key metrics in the third quarter, amid better-than-expected global travel demand. The 14% increase in gross bookings in the third quarter exceeded management’s forecast by 400 basis points, the analyst said. As a result, Devitt increased its 2025 gross bookings growth forecast to 11.5%, up 100 basis points from its previous forecast. It also expects BKNG to report adjusted EBITDA of $9.8 billion, reflecting margin improvement of approximately 180 basis points year over year.
Devitt is ranked #660 out of more than 10,100 analysts followed by TipRanks. Their ratings were 50% profitable, generating an average return of 12.3%. See Booking Holding Financials on TipRanks.
Door Indicator
Devitt also upgraded his rating on the food delivery platform Door Indicator (DASHbuy from warehouse with ) price target $260. TipRanks’ AI Analyst rates DoorDash as “neutral” with a price target of $211.
DASH shares took a hit after the company reported third-quarter results and said it expects to spend “several hundred million dollars” on new initiatives and developments in 2026.
Devitt believes the pullback in DASH shares presents an attractive risk/reward opportunity, with the stock currently trading at approximately 17.7 times its 2027 adjusted EBITDA forecast. The Wedbush analyst noted that the post-earnings sell-off was driven primarily by concerns about the level of capital spending and pressured profit margins.
Devitt acknowledges that higher levels of spending will hurt short-term margins, but argues that such investments in growth initiatives are warranted given that they will expand DASH’s addressable market and bolster its product offerings.
Specifically, Devitt highlighted the administration’s plans to direct increased investment into three key areas: “(1) building a cohesive global technology platform, (2) creating new industries and products, and (3) scaling geographic expansion.”
Overall, Devitt is bullish on DoorDash, believing it has a dominant position in the U.S. food delivery industry. He also noted the company’s solid execution of strategic initiatives as management strives for long-term sustainable growth. Check out DoorDash Hedge Fund Event on TipRanks.
