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Macroeconomic uncertainty and potential policy changes under the administration of President-elect Donald Trump have pushed the stock market to new heights over the past four weeks. But investors will benefit if they ignore short-term noise to focus instead on companies that can overcome challenges and deliver strong returns over the long term.
Top Wall Street analysts look to pick stocks of companies backed by strong financials, reliable business models and that boast attractive product offerings.
With that in mind, here are three stocks favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Service now
This week's top pick is an AI-powered workflow automation software company Service now (now). The company's third-quarter results beat analysts' expectations, thanks to AI-related tailwinds.
After a virtual conversation with ServiceNow CFO Gina Mastantuono, Mizuho analyst Greg Moskowitz reiterated a buy rating on NOW shares. The analyst also raised the price target to $1,070 from $980 to account for the rise in comparable valuation multiples.
The analyst said management is confident in ServiceNow's near-term (Q4) and medium-term (2026) prospects and believes the company is well positioned for sustainable growth. In particular, management touted strong demand building AI-led production momentum for ServiceNow's Pro Plus SKU offering.
Additionally, Moskowitz highlighted the company's excitement about the growth potential of its new Workflow Data Fabric product, which unifies business data and technology across the enterprise and will power new workflows and AI agents. The company expects this new product to double its total addressable market to $500 billion and generate additional monetization.
“We continue to believe that NOW remains very well positioned for high growth over the next few years, supported by continued demand for workflow automation, and strong cross-selling and monetization opportunities from AI,” Moskowitz said.
Moskowitz is ranked No. 221 out of more than 9,100 analysts tracked by TipRanks. Its reviews were profitable 61% of the time, generating an average return of 14.6%. See ServiceNow's insider trading activity on TipRanks.
Snowflake
Next is Snowflake (SNOW), a data analysis software provider. The company's shares rose nearly 33% on November 21 as investors cheered better-than-expected third-quarter results.
TD Cowen analyst Derek Wood was impressed by the third-quarter performance, reaffirmed a buy rating on SNOW and increased his 12-month price target to $190 from $180. The analyst found the company's performance to be uniformly impressive, and said the quarter marked a turning point in Snowflake's growth story.
Wood noted that key drivers behind the third-quarter results include benefits from changes in Snowflake's go-to-market (GTM) strategy, lower-than-expected storage headwinds such as traction in new data engineering services more than offsetting migrations in Iceberg's product and early traction in Cortex AI Services.
The analyst also noted the strength of Snowflake winning large deals, including signing three contracts worth $50 million in the third quarter, and bullish comments on its pipeline of large deals in the fourth quarter.
Wood is optimistic about the outlook for Snowflake, given increasing stability in underlying data storage consumption growth. This growth has been reflected in net retention rate (NRR) trends and “early traction of new AI workloads, especially dynamic schedules.”
Wood is ranked No. 80 out of more than 9,100 analysts tracked by TipRanks. His evaluations were successful 66% of the time, and he achieved an average return of 18.1%. See SNOW stock charts on TipRanks.
Twilio
This week's third pick is Twilio (TWLO), a cloud communications platform. The company impressed investors with its market-beating third-quarter results and raised full-year revenue expectations. San Francisco-based Twilio attributed the third-quarter performance to its financial discipline and innovation.
Impressed by the rebound in business, Monness analyst Brian White upgraded TWLO shares to buy from hold with a price target of $135.
White noted that the company's digital platform saw strong demand during the pandemic, with its stock price touching an all-time high in early 2021. But after the economy reopened, Twilio's growth rate slowed to 4% in the first quarter of 2024 from its 2024 peak. 67% in Q2 2021 and faced an inflated cost structure.
However, White said that after eleven straight quarters of slow revenue growth, Twilio's top line saw a modest acceleration in Q2 2024 and a more pronounced improvement in Q3 2024. The analyst also noted TWLO's higher operating margin, thanks to Company cost containment and efficiency measures as well as divestment.
White is confident in Twilio's ability to combine communications, contextual data and artificial intelligence. “Heading into 2025, we believe Twilio is on track to extend this recovery, and the stock’s valuation remains attractive,” he concluded.
White is ranked No. 44 out of more than 9,100 analysts tracked by TipRanks. Its reviews were profitable 69% of the time, generating an average return of 20.4%. See Twilio's financials on TipRanks.
