Top Wall Street analysts say buy Take-Two and Nvidia

Jen-Hsun Huang, CEO of NVIDIA

Robert Galbraith | Reuters

Last week revealed several key economic updates for July, including a strong labor market, lower than expected inflation and a lower budget deficit, all of which kept market sentiment high.

As cheery as investors may be with all the good news, looming uncertainty always calls for careful investment decisions, with a long-term perspective in mind.

Here are five stocks highlighted by top Wall Street pros, according to TipRanks, a service that ranks analysts based on their performance.

Nvidia

NVIDIA (NVDA), a leading player in the semiconductor market, specializes in the design of graphics processing units for the gaming and professional markets. It also produces system-on-chip units for the mobile computing and automotive industries. Like its peers, Nvidia has also borne the brunt of chip shortages that have disrupted the supply chain.

The company recently announced an update, in which it lowered its expectations for the second quarter of fiscal 2023. Needham’s analyst Rajvindra Gill noted that the stock is still about 20% higher than its most recent low price recorded in early July. (See Nvidia Hedge Fund Trading Activity on TipRanks)

Gill has indeed identified the various setbacks that Nvidia is facing at the same time, which are hurting its margins. For example, GPUs, now on sale, sold for two to three times the manufacturer’s suggested retail price last year.

Nonetheless, Gill has tried to cut through the noise around Nvidia’s lower estimates and look past short-term hurdles. He found that Nvidia’s balance sheet is one of the strongest among its industry peers, which will help the company through tough times.

Additionally, with the growing demand for data centers, Nvidia’s most important end market, the company is expected to experience considerable growth in the coming years. “We believe Data Centers, the end market that we consider NVDA’s biggest growth driver, is recovering as hyperscaler sales have increased in recent quarters and visibility has improved. “, observed Gill.

Gill reiterated a buy rating on the stock, with a price target of $185. Gill’s five-star rating and 176e ranking among approximately 8,000 analysts followed on TipRanks, make his beliefs worth considering. Each of its 252 out of 402 successful reviews generated an average return of 14.9%.

Micron Technology

micron (MU) is another of the largest microchip companies in the United States. The company lowered its forecast, citing weak final demand and undesirable inventory conditions.

However, the analyst from Mizuho Securities Vijay Rakech, another analyst with a five-star rating on TipRanks, pointed out that the full-year DRAM revenue estimate provided by Micron management is mid-to-high single-digit annual growth; and that of NAND is at a low to mid-teenage year-over-year percentage gain. Nevertheless, the long-term view was encouraging. Micron expects DRAM’s long-term growth to be in the mid-teen percentile and NAND’s to be around 28%.

Additionally, Rakesh was bullish on Micron’s positioning to benefit from secular growth trends driven by falling NAND and DRAM costs, as well as content growth in various emerging technologies. (See Micron Dividend Date & History on TipRanks).

Although the analyst cut MU’s stock price to $75 from $84, he reiterated his longer-term view of the company with a buy rating.

Rakesh was ranked #94 out of nearly 8,000 analysts tracked on TipRanks. Additionally, 59% of its ratings were profitable, with 22% average returns generated on each rating.

MCA Research

Wafer Manufacturing Equipment Supplier ACM Research (CCMR) has significant operations in China and is benefiting from the easing of lockdown measures in the country. The company’s performance in the second quarter was better than expected and earnings commentary indicated many positives for the company’s growth prospects.

According to the Needham analyst Quinn Bolton, boosting its full-year sales guidance from $365 million to $405 million, and the possibility of reaching the high end of the range were “the most notable conclusion of the call”. (See ACM Research Stock Investor Sentiments on TipRanks)

Bolton also noted that ACM Research is expected to increase shipments in the second half, thanks to the lifting of Covid-19 restrictions in China. This will help the company’s new products gain momentum.

The analyst was also optimistic about the company’s progress in selling its products to non-Chinese territories.

“Investors have been wary of ACMR’s high exposure to China, but we believe this thesis will change over time with ACMR’s globalization efforts. In 4Q21 alone, the company announced design contracts with four global IC manufacturers, including one in the United States,” Bolton said. .

Bolton reiterated a buy rating on ACM Research with a price target of $25. With a #1 ranking among approximately 8,000 analysts tracked on TipRanks, Bolton’s opinions are highly valued by investors. Additionally, the analyst was successful with 72% of his ratings, with each rating earning 45% average return.

Vimeo

Video hosting, sharing and services platform Vimeo (VMEO) has not been able to make a profit in the past year. Moreover, its stock price fell almost 78% during this period.

As downcast as it sounds, the Wells Fargo analyst Brian Fitzgerald is very optimistic about the company. Satisfactory second quarter results were accompanied by mixed direction from management. The company expects revenue growth to slow in the second half of the year, but also expects EBITDA to be higher than expected. (See Opinions and sentiments of Vimeo bloggers on TipRanks)

Vimeo’s focus on optimizing marketing spend is also a solid move, according to Fitzgerald. Although the company has reduced overt spending, management has indicated it will monitor several performance indicators to determine when and where to invest more. Fitzgerald believes such operational discipline will ultimately lead to positive EBITDA in 2023.

Additionally, Fitzgerald also expects this earnings season to be the last with a slew of downside forecasts.

The analyst reiterated a buy rating on the stock with a price target of $12 (vs. $16 previously). Ranked No. 141 among roughly 8,000 analysts on the TipRanks database, Fitzgerald managed to yield 58% profitable ratings, with each rating generating an average return of 19%.

Take-Two interactive software

Interactive software provider Take two (TWO) has big-banner video games in its prize pool, including Grand Theft Auto and Red Dead Redemption. However, along with the rest of the broader market, the company has also lost a good chunk of its valuation, with its share price falling nearly 31% year-to-date.

Nevertheless, this company remains on Brian Fitzgerald’s buy list. Take-Two’s recently released fiscal 2023 first quarter results were quite encouraging, supported by recurring customer spending.

Additionally, its recent acquisition of mobile gaming giant Zynga is expected to give its games portfolio a boost, thereby generating more revenue. (See Take-Two Stock Chart on TipRanks)

Based on TTWO’s positive earnings commentary, the analyst noted that the process of integrating Zynga into its operations appears to be proceeding seamlessly. In fact, Fitzgerald recalled that “management expects to achieve $100 million in annual cost synergies within two years of closing.”

“We remain convinced that the acquisition of ZNGA will prove to be smart. TTWO now has the strongest mobile games catalog of its peers, with many levers to pull for margin expansion and the possibility of extending its IP existing to the fastest-growing platform in gaming,” noted Fitzgerald, who reiterated a buy rating on the stock with a price target of $185.

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