Top Wall Street analysts pick 3 stocks for their attractive prospects

Macroeconomic uncertainty and potential policy changes under President-elect Donald Trump's administration have driven the stock market to new heights over the past four weeks. But investors can benefit from ignoring the short-term hype to focus instead on companies that can rise to the challenge and deliver solid returns over the long term.

Top Wall Street analysts strive to pick stocks of companies that are backed by strong financials, sound business models and that boast attractive product offerings.

With that in mind, here are three favorite stocks the best professionals on the Streetaccording to TipRanks, a platform that ranks analysts based on their past performance.

This week's first pick is the AI-enabled workflow automation software company ServiceNow (NOW). The company's third-quarter results beat analysts' expectations, thanks to AI-related tailwinds.

After a virtual fireside chat with ServiceNow CFO Gina Mastantuono, Mizuho analyst Greg Moskowitz reiterated a buy rating on shares of NOW. The analyst also raised the target price to $1,070 from $980 to account for the rise in the comparative valuation ratios.

The analyst said management is confident in ServiceNow's near-term (Q4) and medium-term (2026) outlook and believes the company is well-positioned for sustained growth. Specifically, the guide touted strong demand that is building generative, AI-driven momentum for ServiceNow's Pro Plus SKU offering.

Moskowitz also highlighted the company's excitement about the growth potential of its new Workflow Data Fabric product, which brings together business and technology data in a single enterprise and will power new workflows and AI agents. The company expects this new product to double the total addressable market to $500 billion and drive additional monetization.

“We continue to believe that NOW remains very well positioned for high growth over the next several years, fueled by continued demand for workflow automation, strong cross-selling capabilities and AI monetization,” Moskowitz said.

Moskowitz is ranked No. 221 among more than 9,100 analysts tracked by TipRanks. Its ratings are profitable 61% of the time, delivering an average return of 14.6%. Look ServiceNow Insider Trading Activity on TipRanks.

It's next Snowflake (SNOW), a provider of data analysis software. The company's shares jumped nearly 33% on Nov. 21 as investors cheered better-than-expected third-quarter results.

Impressed by third-quarter performance, TD Cowen analyst Derrick Wood reaffirmed a buy rating on SNOW and raised its 12-month price target to $190 from $180. The analyst found the company's performance equally impressive and said the quarter marked a turning point in Snowflake's growth story.

Wood noted that key drivers behind third-quarter results included benefits from changes in Snowflake's go-to-market (GTM) strategy, lower-than-expected storage headwinds as traction in new data engineering services more than offset migrations in the Iceberg product and early traction in Cortex AI Services.

The analyst also mentioned the strength of Snowflake's big deal wins, including the signing of three $50 million contracts in the third quarter, and bullish comments on the Q4 big deal streak.

Wood is bullish on the outlook for Snowflake given the increased stability in core data storage consumption growth. This growth was reflected in net retention rate (NRR) trends and “early traction with new AI workloads, particularly dynamic tables.”

Wood ranks No. 80 among more than 9,100 analysts tracked by TipRanks. Its evaluations are successful 66% of the time, delivering an average return of 18.1%. Look SNOW stock charts on TipRanks.

This week's third pick is Twilio (TWLO), cloud communication platform. The company impressed investors with market-beating third-quarter results and raised its full-year revenue forecast. San Francisco-based Twilio attributed the third-quarter performance to its financial discipline and innovation.

Impressed with the business recovery, Monness analyst Brian White upgraded TWLO stock to Buy from Hold with a $135 price target.

White noted that the company's digital platform has seen solid demand during the pandemic, with its stock price hitting an all-time high in early 2021. But after the economy reopened, Twilio's growth rate slowed to 4% in Q1 2024. from a peak of 67% in the second quarter of 2021. and faces a bloated cost structure.

However, White said that after eleven consecutive quarters of slower revenue growth, Twilio's top line saw a modest acceleration in the second quarter of 2024. and a more visible improvement in the third quarter of 2024. The analyst also noted the increase in TWLO's operating margin, thanks to the company's cost containment and efficiency measures, as well as the sale.

White is confident in Twilio's ability to combine communications with contextual data and AI. “Heading into 2025, we believe Twilio is on track to extend this recovery and the stock's valuation remains attractive,” he concluded.

White is ranked No. 44 among more than 9,100 analysts tracked by TipRanks. Its ratings are profitable 69% of the time, delivering an average return of 20.4%. Look Twilio Financial Statements on TipRanks.