Every company on the list is in the technology or communication services sectors, and every name has a buy-equivalent rating from at least 70% of Wall Street firms that cover the stock. Furthermore, based on analyst price targets, each stock has at least a 10% upside potential.
Lam Research is one of the names on the list, and the semiconductor company is set to report earnings after the market closes on Wednesday. Across the board, 75% of analysts who cover the company rate it as a buy. According to FactSet, the average price target for the shares is $746, which is about 17% higher than where the stock closed on Friday.
The company’s report comes at a critical juncture in the chip industry, with supply unable to keep up with demand. Shortages in the space industry have had a ripple effect across industries, affecting companies ranging from technology to automobiles to solar panels.
Intel shares fell last week after the company released its second-quarter earnings report, as margins fell due to supply constraints.
Facebook is also expected to report earnings after the market close on Wednesday, in what could be a market-moving report. Approximately three-quarters of analysts who cover the tech behemoth rate the company as a buy. According to StreetAccount, Wall Street expects the company to report earnings per share.
This week, ten Dow components and 167 S&P 500 companies will report quarterly results, during an earnings period that many believe will make or break the market. According to Refinitiv data, 89 percent of companies that reported through last week beat earnings estimates while 84 percent exceeded revenue expectations.
Fiserv and T-Mobile are two more names to watch this week.
The former is scheduled to report results before the market opens on Tuesday. Currently, 73 percent of Wall Street analysts rate Fiserv, a financial services company, as a buy.
T-Mobile, on the other hand, is scheduled to launch on Thursday after the market closes. According to StreetAccount estimates, Wall Street analysts expect the mobile company to earn 51 cents per share on $19.36 billion in revenue.
However, not all of the Street’s top tech stocks report earnings this week. Micron, which is rated a buy by 84% of analysts, reported earnings on June 30.
Activision Blizzard will report next week, while Salesforce is scheduled to report on September 1.
Morgan Stanley suggestions
“Secular Growth Stocks is our list of companies that we believe can deliver strong fundamental growth, driven by forces such as sustainable competitive advantages, product cycles, market share gains, or pricing power,” Morgan Stanley analysts wrote in a client note.
Morgan Stanley screened the 1,500 largest stocks for the following criteria to identify stocks with strong growth characteristics both before and after the pandemic:
For the 16 quarters ending in the fourth quarter of 2019, the bank’s quantitative style model classified as “growth.”
Stocks that have experienced positive year-over-year revenue growth in each of the last 12 quarters, up to and including the fourth quarter of 2019.
Stocks expected to generate significant positive revenue growth in 2022 and 2023
Morgan Stanley analysts rate stocks as overweight or equal weight.
Analysts’ earnings and revenue projections appear to be attractive in comparison to their industry.
Morgan Stanley has highlighted Carvana in its list of long-term growth stocks. According to analyst Adam Jonas, the company has the potential to become the largest used car dealer in the United States.
“Carvana’s fully digital experience with full vertical integration — both software and physical inspection recondition centers (IRCs)/logistics — provides a superior consumer experience that can scale profitably,” said Jonas.
Carvana shares have risen another 41% this year, following a whopping 160 percent rise last year as the pandemic boosted used car sales.
The list also includes a slew of megacap tech names such as Alphabet, Amazon, Apple, Facebook, and Tesla, all of which are set to report quarterly earnings next week.
Morgan Stanley is also optimistic about Shopify, describing it as a “best-in-class asset.”
According to analyst Keith Weiss, Shopify is “well-positioned to capitalize not only on the general eCommerce tailwind, but also on specific trends such as DTC (direct to consumer), the shift toward SaaS-based commerce deployments, and omnichannel retailing.”
Last year, the e-commerce platform saw an increase in demand as many small businesses moved operations online during the forced shutdowns. After rising 184 percent in 2020, the stock is up 45 percent this year.
Morgan Stanley’s list also includes Farfetch, Mastercard, DraftKings, Lululemon, and Five Below.