Wall Street has long favored Nvidia (NASDAQ: NVDA). This year, the chip stock is up 80% after rising 240% in 2023. Analysts don't anticipate this hot streak to last. The consensus price objective for Nvidia is marginally over its current share price. Three "Magnificent Seven" stocks Wall Street expects to outperform Nvidia in the coming year.
1. Apple Apple (AAPL) lagged in 2024. Microsoft became the world's largest firm by market cap. However, experts are more optimistic about Apple than any other Magnificent Seven stock. Apple has an average 12-month price forecast of over 9% upside. 32 of 36 LSEG analysts surveyed in April recommend the stock. Hold the stock, say others.
Wall Street's optimism on Apple may surprise. After slowing sales growth, the tech giant's valuation is high, with shares trading at roughly 26 forward earnings multiples. Apple's June developer conference may be a spark, analysts say. Event attendees anticipate the corporation to showcase its generative AI strategy.
2. Amazon Amazon (NASDAQ: AMZN) hasn't copied Nvidia's stellar returns. However, the e-commerce and cloud services giant thrilled investors with an 80% leap last year and 20% this year. Wall Street expects Amazon to rise further. The consensus stock price objective is 6.5% higher than the current price. Amazon is a buy or strong buy for 43 of 47 LSEG analysts surveyed in April.
Generative AI continues to benefit Amazon Web Services (AWS) since customers like to run apps on their data. AWS dominates the cloud platform market, therefore many companies train and deploy generative AI apps there. Additionally, Amazon's advertising business is booming. It uses AI to make adverts more relevant to clients. It also increased Prime Video ads.
3. Alphabet Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) shares rose 58% in 2023. Over 10% of the stock has risen in 2024. Alphabet, like Apple and Amazon, has room to grow, says Wall Street. An average analyst's 12-month price target is roughly 6% higher than the present price. Alphabet was rated a buy or strong buy by 38 of 43 analysts surveyed by LSEG in April.
Alphabet's Google business has had two generative AI software embarrassments: Bard last year and Gemini this year. Analysts don't appear concerned about these mistakes. They prioritize Google Cloud growth and search domination. Some believe Alphabet's Waymo self-driving car venture to succeed long-term.
Why Wall Street may be right Wall Street's price targets are unreliable. Even high-paid experts who analyze organizations' operations can't forecast the future. I think Wall Street may be right about Apple, Amazon, and Alphabet. They could be right about Nvidia.
Nvidia could rise further, but competition is rising. Any glitch could drop the stock. Good news at the developer conference might boost Apple stock. Generous AI tailwinds should help Amazon and Alphabet grow in the next quarters. Wall Street makes mistakes. However, I agree with the analysts' Magnificent Seven stock predictions.
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