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Shares of Apple (AAPL) once again sold off after the company announced its quarterly results last week. The tech giant reported revenue of $89.5 billion and adjusted earnings of $1.46 per share in fiscal Q4 of 2023 (ended in September). While Apple surpassed consensus estimates for revenue of $89.28 billion and earnings of $1.39 per share, its sales have now declined for four consecutive quarters.
Its iPhone business segment was the only hardware business that reported sales growth in Q4, and investors appear wary as the company lacks a clear path to growth this holiday season after several quarters of revenue shrinkage. Moreover, while Wall Street analysts expected Apple to increase revenue by 5% in Q1 of fiscal 2024, the tech behemoth estimated flat top-line growth compared to the year-ago period.
Wall Street is hardly giving up on the tech giant yet, with an average rating of “moderate buy.” Out of the 29 analysts covering Apple, 17 recommend “strong buy" (down from 18 two months ago), three recommend “moderate buy,” and nine recommend “hold.” The average target price for AAPL is $202.96, which is 11% above the current trading price.
While these consensus forecasts are still moderately bullish, there are three mega-cap tech stocks analysts like even better than Apple. Here's a look at three “strong buy” rated stocks that have been scoring analyst upgrades in recent months - not downgrades.
Amazon Stock
The largest e-commerce company in the world, Amazon (AMZN) also leads the public cloud segment. It is also the third largest digital advertising platform in the world, after Alphabet’s (GOOGL) Google and Meta Platforms (META).
Amazon accounts for 7.5% of the global digital ad market and grew ad sales by 26% to $12 billion in Q3. Comparatively, ad sales for Meta and Google were up 24% and 11%, respectively, in Q3.
Despite its massive size, Amazon is forecast to end 2024 with $600 billion in sales, up from $514 billion in 2022. Its profit margins are also estimated to improve from a loss of $0.27 per share in 2022 to earnings of $2.96 per share in 2024.
Out of the 41 analysts covering Amazon, 37 recommend “strong buy” - up from 34 a month ago - three recommend “moderate buy,” and one recommends “hold.” The average target price for AMZN is $172.12, which is 22% above current levels.
Microsoft Stock
Another mega-cap company, Microsoft (MSFT), is firing on all cylinders. Up 51% in 2023, Microsoft stock is trading near all-time highs as it continues to enjoy an early-mover advantage in artificial intelligence (AI).
In fiscal Q1 of 2024 (ended in September), Microsoft reported revenue of $56 billion, an increase of 13% year over year. Its software and cloud businesses drove sales, and analysts are targeting a revenue increase of 4.8% to $222 billion in fiscal 2024.
Out of the 36 analysts covering Microsoft, no fewer than 30 recommend “strong buy,” while three recommend “moderate buy,” and three recommend “hold.” Plus, MSFT no longer has any “sell” ratings, as of a month ago. The average target price for MSFT is $393.01, which is 8.5% above the current trading price.
Nvidia Stock
The final tech stock on my list is Nvidia (NVDA), which has surged 224% YTD and a whopping 827% in the past five years. Nvidia is among the key players in the AI space, as its chips and data centers are used to power AI platforms. Basically, Nvidia is selling shovels amid a gold rush, making it a top ancillary investment in this highly disruptive vertical.
Valued at $1.15 trillion, Nvidia is among the fastest-growing tech stocks globally. It is forecast to increase sales from $27 billion in fiscal 2023 to $78 billion in fiscal 2025. Its adjusted earnings are forecast to surge over 400% to $16.07 per share in this period.
Out of the 35 analysts covering NVDA stock, 31 recommend “strong buy,” while only three recommend “moderate buy” and one recommends “hold.” That's up from 28 “strong buys” and three “holds” just a few months back. The average target price for NVDA stock is $625.53, which is 32% above the current trading price.
