Top Wall Street analysts favor these 3 stocks for solid upside

Concerns over steep valuations for AI stocks and questionable expectations of interest rate cuts in December weighed on investor sentiment in recent trading sessions. At present, however, NvidiaThe company’s strong earnings last week seem to undermine the idea that everything associated with investing in artificial intelligence is in a bubble.

Investors looking to capitalize on the recent sell-off and pick up some attractive stocks over the long term can follow the recommendations of top Wall Street analysts. These experts can help provide key insights 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 main 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 growing by 40%.

Recently, Baird analyst William Bauer initiated coverage of Microsoft with a buy and Target price is $600. TipRanks’ AI analyst is also bullish on MSFT, giving it an “outperform” rating and a $628 price target.

“Microsoft is leading the AI ​​revolution with infrastructure and applications, powered by the OpenAI relationship, providing a comprehensive AI platform for enterprises and consumers alike,” Bauer said, explaining his optimism.

Power sees MSFT’s partnership with ChatGPT’s parent company, OpenAI, as a key differentiator, helping it power AI at scale and quickly. After committing to a $13 billion investment, Microsoft recently announced a plan, the 5-star analyst said An additional $250 billion investment in Azure Over several years.

The analyst discussed the impressive growth in MSFT’s total revenue and Azure business in the September quarter, with the cloud business now making up 60% of total revenue. Bauer also highlighted the power of Microsoft’s core applications, including Microsoft 365, LinkedIn and Dynamics. He noted that MSFT’s revenue growth in 1QFY26 was accompanied by a strong operating margin of 49% and free cash flow margin of 33%. Microsoft’s strong margins ensure continued double-digit EPS growth, he said.

Bauer believes in Microsoft’s near- and long-term potential, despite any immediate pressures from AI capital spending concerns.

Power is ranked No. 287 out of more than 10,100 analysts tracked by TipRanks. His evaluations were successful 57% of the time, and he achieved an average return of 17%. See Microsoft’s ownership structure on TipRanks.

Booking Holding

Online Travel Agent (OTA) Booking Holding (Baking) is another pick this week. The owner of Priceline and Kayak posted impressive results in the third quarter, with double-digit gains in total bookings and revenue.

Scott Devitt was impressed by the Q3 performance and attractive valuation, and upgraded BKNG to Buy from Hold With Target price $6,000. In comparison, the TipRanks AI analyst has a “Neutral” rating on Booking Holdings with a price target of $5,406.

“Booking remains the best online location in our view,” Devitt said, drawing on many positives, from the company’s size and diversification to strong liquidity and free cash flow conversion.

The top-rated analyst also noted management’s impressive history of successfully executing major strategic initiatives. Devitt highlighted Booking Holdings’ growing market share in alternative accommodation while improving costs and increasing efficiencies. He said the company’s cost savings support reinvestment in growth initiatives to achieve long-term goals.

Additionally, Devitt discussed Booking’s impressive growth across key metrics in the third quarter amid better-than-expected global travel demand. Third-quarter gross bookings growth of 14% beat management’s guidance by 400 basis points, the analyst said. As a result, Devitt raised his 2025 gross bookings growth estimate by 100 basis points from his previous forecast, to 11.5%. Furthermore, BKNG is expected to report adjusted EBITDA of $9.8 billion, reflecting year-over-year margin expansion of approximately 180 basis points.

Devitt is ranked No. 660 out of more than 10,100 analysts tracked by TipRanks. His evaluations were profitable 50% of the time, generating an average return of 12.3%. See Holding Financials on TipRanks.

DoorDash

Devitt also upgraded his rating for the food delivery platform DoorDash (Dash) to buy from hold with a Target price $260. TipRanks’ AI analyst rates DoorDash as “Neutral” with a price target of $211.

DASH shares were hurt when the company reported mixed third-quarter results and said it expects to spend “several hundred million dollars” on new initiatives and development in 2026.

Devitt believes the pullback in DASH shares represents an attractive risk/reward opportunity, with the stock now trading at about 17.7 times adjusted EBITDA estimates for 2027. The Wedbush analyst noted that the post-earnings sell-off is mainly due to concerns about the level of capital spending and compressed profit margins.

Devitt acknowledges that a higher level of spending will hurt margins in the near term, but says such investments in growth initiatives are justified given that they will expand DASH’s addressable market and enhance its product offerings.

Specifically, Devitt highlighted management’s plans to direct additional investments toward three key areas: “(1) creating a cohesive global technology platform, (2) building new segments and products, and (3) expanding geographic expansion.”

Overall, Devitt is bullish on DoorDash, believing it has taken a dominant position in the U.S. food delivery sector. Furthermore, he pointed to the company’s strong execution across strategic initiatives as management seeks long-term sustainable growth. See DoorDash hedge fund activity on TipRanks.