Top Wall Street analysts favor these 3 stocks for solid upside

Concerns about the steep valuations of artificial intelligence (AI) stocks and a questionable outlook for an interest rate cut in December weighed on investor sentiment in recent trading sessions. For now, however, Nvidia‘s solid earnings last week seemed to undermine the idea that everything tied to AI investment is in a bubble.

Investors looking to capitalize on the recent selloff and pick up some attractive stocks for the long term can track 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 viewed as one of the major beneficiaries of the AI boom. Last month, the company reported better-than-expected results in its fiscal first quarter, with revenue from the Azure cloud business growing by 40%.

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

“Microsoft is leading the AI revolution with infrastructure and applications, aided by its OpenAI relationship, providing an end-to-end AI platform for enterprises and consumers alike,” said Power, explaining his optimism.

Power sees MSFT’s partnership with ChatGPT parent OpenAI as a key differentiator, helping it run AI at scale and speed. The 5-star analyst said that after a commitment to invest $13 billion, Microsoft recently announced an incremental $250 billion Azure investment 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 constituting 60% of the overall top line. Power also highlighted the strength in Microsoft’s core applications, including Microsoft 365, LinkedIn and Dynamics. He noted that MSFT’s revenue growth in Q1 FY26 was accompanied by a solid operating margin of 49% and free cash flow margin of 33%. Microsoft’s strong margins are ensuring continued double-digit EPS growth, he said.

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

Power ranks No. 287 among more than 10,100 analysts tracked by TipRanks. His ratings have been successful 57% of the time, delivering an average return of 17%. See Microsoft Ownership Structure on TipRanks.

Booking Holdings

Online travel agent (OTA) Booking Holdings (BKNG) is another pick this week. The Priceline and Kayak owner posted impressive third-quarter results, with double-digit gains in gross bookings and revenue.

Impressed by the Q3 performance and attractive valuation, Wedbush analyst Scott Devitt upgraded BKNG to buy from hold with a price targe of $6,000. By comparison, TipRanks’ AI Analyst has a “neutral” rating on Booking Holdings with a price target of $5,406.

“Booking remains the best-positioned OTA in our view,” benefiting from several positives, from the company’s scale and diversification to solid liquidity to free cash flow conversion, Devitt said.

The top-rated analyst also noted management’s impressive history of successfully executing major strategic initiatives. Devitt highlighted Booking Holdings’ widening market share in alternative lodging while optimizing costs and driving efficiencies. The company’s cost savings are supporting reinvestment in growth initiatives to achieve longer-term targets, he said.

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

Devitt ranks No. 660 among more than 10,100 analysts tracked by TipRanks. His ratings have been profitable 50% of the time, delivering an average return of 12.3%. See Booking Holdings Financials on TipRanks. 

DoorDash

Devitt also upgraded his rating for food delivery platform DoorDash (DASH) to buy from hold with a price target of $260. TipRanks’ AI Analyst rates DoorDash “neutral” with a price target of $211.

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

Devitt believes that the pullback in DASH shares presents an attractive risk/reward opportunity, with the stock now trading at about 17.7x his 2027 adjusted EBITDA estimate. The Wedbush analyst noted that the post earnings selloff was mainly due to concerns about the level of capital spending and pressured profit margins.

Devitt admits that the higher level of spending will hurt near-term margins, but argues such investments in growth initiatives are warranted given that they’ll expand DASH’s addressable market and bolster its product offerings.

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

Overall, Devitt is bullish on DoorDash, believing it has held a dominant position in the U.S. food delivery sector. Moreover, he noted the company’s solid execution across strategic initiatives as management pushes for long-term sustainable growth. See DoorDash Hedge Fund Activity on TipRanks.