After a brutal 2022, the Nasdaq-100 technology index remains down 24% from its all-time high. That suggests there are some potentially great stock buys out there right now. Retail investors looking for suggestions on the best buys out there might want to consider taking cues from the professionals on Wall Street. Of course, Wall Street analysts don't always get things right. But sometimes, enough of them arrive at such a clear consensus about a company that their collective view is hard to ignore.
Let's look at three stocks that have been given the highest possible buy rating among the majority of analysts tracked by The Wall Street Journal. Here's why buying them now could supercharge your portfolio.
1. Amazon
Shares of Amazon (AMZN -1.65%) have plunged in value (down 49% from their all-time high) amid the broader sell-off in the tech sector. Inflation ripped through the economy over the last 18 months, which dealt a blow to consumer spending. Since the majority of Amazon's revenue is driven by its e-commerce business, investors have shunned the stock.
That drop created a buying opportunity for those focused on the company's long-term prospects. After all, Amazon is more than just an online retail giant. The company also leads the cloud services industry through its Amazon Web Services platform, which provides more digital solutions to businesses than any of its competitors. Whether they need simple website hosting, data storage, or advanced tools like machine learning, AWS has them covered.
AWS only accounted for 15.5% of Amazon's $513.9 billion in total revenue in 2022. But according to one estimate by Grand View Research, cloud computing could be a $619 billion opportunity this year, and a $1.5 trillion one by 2030. So AWS has a long runway to grow.
Amazon also has a booming digital advertising segment and a growing portfolio of streaming assets including live sports. It even has a horse in the electric vehicle race through its passive stake in Rivian Automotive -- though Rivian's plunging share price last year drove Amazon to its first overall net loss since 2014.
But one thing is certain: Amazon has Wall Street's vote. Out of 53 analysts tracked by The Wall Street Journal, 40 rate Amazon stock a buy (the highest rating). A further eight are in the overweight (bullish) camp, while four recommend holding. Only one analyst in the group maintains a sell rating.
Investors might want to take advantage of the discount in Amazon stock before it stages a comeback.
2. Axcelis Technologies
If you've never heard of Axcelis Technologies (ACLS 1.34%), you're not alone. It's a tiny tech company worth just $4.2 billion, but many investors seemed to ignore the stock in the broader tech sell-off in 2022, and it currently trades near an all-time high. Axcelis operates in the fast-growing semiconductor sector, where it provides ion implantation equipment to the world's largest producers of advanced computer chips.
While most tech companies suffered a slowdown last year, Axcelis generated $920 million in revenue -- up 39% compared to 2021 -- blowing away its own expectations, which had previously been revised higher. Moreover, the company amassed a record order backlog worth more than $1.1 billion, which should lead to another strong year of sales growth in 2023.
Axcelis' equipment is a critical part of the semiconductor fabrication process, so manufacturers can't expand their production capacity without it. Therefore, Axcelis is catching a tailwind from all the chipmakers preparing for growth over the coming decade. Life trends more toward digitization each day, and that shift is powered by chip hardware.
Axcelis isn't just growing quickly right now -- it's also generating record profits. It delivered $5.46 in earnings per share last year, up a whopping 89% compared to 2021. That result places its stock at a price-to-earnings (P/E) ratio of just 23.8. So despite the company's stellar performance, it's still marginally cheaper than the Nasdaq-100 index, which trades at a P/E ratio of 24.5.
It's little wonder Wall Street is on board. Axcelis stock is lightly covered, with only six analysts tracked by The Wall Street Journal, but every single one of them has given it the highest possible buy rating.
3. Uber Technologies
Whether it's mobility (ride-hailing), food delivery, or freight, Uber Technologies (UBER -0.07%) has become a staple of everyday life for its 131 million platform customers. Its mobility business was a casualty of the pandemic because social restrictions meant fewer people needed to travel, but it came roaring back in 2022.
Uber's operational diversity might be the best feature of its business. While mobility has always been core to the company's financial performance, it pivoted during the worst of the pandemic and drove impressive growth through its food delivery segment UberEats.
Now that restaurants have reopened and people are on the move once again, Uber's delivery bookings grew by just 14% in the recent fourth quarter. By comparison, its mobility business surged by 37% and finally reclaimed the mantle of Uber's largest financial contributor.
But there's a powerful growth story emerging in Uber's freight segment. It has amassed more than 200,000 users so far with $17 billion in freight under management, making it one of the largest logistics networks in the world already. Freight only accounts for about 17% of Uber's total revenue at the moment, but the company is eyeing a $4 trillion global addressable opportunity in trucking alone, so it could one day grow to make a leading financial contribution.
Wall Street certainly recognizes the potential. Of the 46 analysts tracked by The Wall Street Journal, 35 gave Uber stock the highest possible buy rating. A further six are in the overweight (bullish) camp, while four recommend holding. There's one lonely analyst in the sell category.
A consensus that bullish is worth investors' attention.
