NVIDIA NASDAQ: NVDA it’s not the most expensive stock at the end of third-quarter earnings season, ending a trend that has continued for nearly two years. While this is potentially bad news for the market, it should give investors hope that the stock rally is expanding and the S&P 500 will continue its upward trend. NVIDIA, now ranked 12th on MarketBeat’s list of most updated stocks, has been supplanted by consumer names and companies well positioned for the second wave of artificial intelligence. The second wave of AI is the introduction of AI models and applications. This segment of the industry is expected to grow faster and be larger than the infrastructure that was the first wave.
Walmart became the most updated stock of the third quarter earnings season
Walmart today
(As of 12/17/2024 ET)
- 52 week range
- $51.04
▼
$96.18
- Dividend yield
- 0.87%
- P/E ratio
- 39.16
- Target price
- $93.69
Walmart New York Stock Exchange: WMT This is the most upgraded stock in the third quarter reporting period. The company has received 38 positive changes or updates over the past 90 days, including 16 since the release of third-quarter results. Activity since issue includes a one-time downgrade to Hold, but the $91 price target is in line with broad consensus in mid-December. Consensus is in line with the market price, but will rise in 2024 on an upward revision trend of 50% for the year and 15% since the third quarter, with most new targets above that. The revision trend leads to a new all-time high and a potential rise to $115 or higher.
The reason is performance. Walmart continues to prove its leadership position by outperforming competitors while gaining market share. 2024 results include sustained outperformance, solid earnings, improved guidance and sufficient cash flow to support a stable return on capital. Return of capital includes dividends and share repurchases, which offset share-based compensation and gradually reduce the number of shares from the previous year. The 2025 outlook assumes continued growth, cash flow trends and return on capital. Among the catalysts for rising stock prices is the failed Kroger merger. New York Stock Exchange: KR and Albertson New York Stock Exchange: ACIwhich leaves Walmart’s grocery business intact and safely behind the moat.
Metaplatforms: rise to 2nd position
Metaplatforms today
(As of 09:04 am ET)
- 52 week range
- $340.01
▼
$638.40
- Dividend yield
- 0.32%
- P/E ratio
- 29.20
- Target price
- $638.00
Meta platforms NASDAQ: META not new to the most updated list of stocks, but moved up to 2nd position. The stock posted 37 positive revisions during the quarter, 19 since its Q3 release. Highlights from the third quarter included better-than-expected revenue growth of 19% and a leveraged increase in net income, helped by artificial intelligence.
AI is helping drive engagement and monetize traffic across the Meta Platforms family of apps, including Facebook, and its influence is expected to grow. The only bad news in the report is that AI spending is expected to rise in 2025, but this is offset by the long-term benefits that the investment is expected to bring. Meta is also deepening its partnership with Oracle, using the Oracle cloud to train its Llama AI models while Oracle embeds them into its services.
Analysts rate Meta Platforms a Moderate Buy and see the stock moving slightly higher, in line with consensus. However, the consensus target for 2024 increases by almost 100%, and the revision trend remains positive. Recent targets push the price range to around $800, which is about 30% higher than mid-December prices.
Salesforce: a force to be reckoned with
Salesforce today
(As of 12/17/2024 ET)
- 52 week range
- $212.00
▼
$369.00
- Dividend yield
- 0.46%
- P/E ratio
- 57.73
- Target price
- $378.86
Salesforce New York Stock Exchange: CRM ranks among today’s top artificial intelligence services companies. The company has been using data mining and machine learning since its inception and has strengthened its leadership position. Today, Salesforce is the #1 platform for integrated CRM services, allowing companies to generate, store, track and use their data while increasing efficiency and ensuring customer satisfaction.
Third quarter highlights included mixed results compared to consensus estimates. However, the bar was set high, and strong growth, leverage, cash flow, strong balance sheet and return on equity offset weaker-than-expected earnings. Salesforce is buying shares and is now paying a dividend. The company joined the ranks of wannabe dividend aristocrats by launching token distribution at the beginning of the year. The payout is about 12% of income, leaving plenty of room for annual increases that could reach double digits due to rising earnings.
As for analysts, Salesforce stock received 37 positive revisions in the fourth quarter and 22 since the release of third-quarter results. The consensus target is for a small single-digit increase from the $355 level, but it is rising, up more than 50% last year and 15% in December, with revisions leading to higher levels. At the high end, this market will be around $450 in 2025, representing another 30% growth potential.
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