The U.S. stock market is experiencing heightened volatility driven by the uncertain outlook surrounding the timing and extent of interest rate reductions by the Federal Reserve. Despite these challenges, several companies continue to deliver strong performances, demonstrating the resilience of their business models. To identify these companies with attractive growth potential, investors can turn to the recommendations of top analysts on Wall Street. In this article, we will explore three stocks favored by these experts.

ServiceNow (NOW), a cloud-based workflow management platform, recently reported strong results for the fourth quarter of 2023. The company also raised its guidance for 2024 subscription revenue and operating margin, indicating positive growth prospects. Baird analyst Robert Oliver maintains a buy rating on NOW stock and has increased his price target to $870 from $780. Oliver highlights that all key financial metrics exceeded expectations in Q4 2023. Moreover, the company’s current remaining performance obligations (cRPO) that will be recognized as revenue in the next 12 months grew by 23% on a constant currency basis. Although this growth rate represents a slight deceleration from the previous quarter, it surpasses the firm’s own guidance of more than 21% growth. Oliver attributes the upside in cRPO to net new annual contract value (ACV) and higher early renewals. He also notes the strength of ServiceNow’s public sector business and the traction in its generative artificial intelligence (AI) products. Oliver’s revised price target reflects a reasonable valuation of 44x his 2025 free cash flow (FCF) estimate, considering ServiceNow’s above-average growth profile, strong competitive positioning, large total addressable market (TAM), and top-decile FCF margin.

Streaming giant Netflix (NFLX) delivered impressive fourth-quarter results, adding 13.1 million subscribers and driving the stock’s 16% gain in 2024. DBS analyst Sachin Mittal attributes the robust subscriber growth to the company’s crackdown on password sharing in over 100 markets since May 2023. Mittal highlights that advertising membership increased by 70% sequentially in Q4 2023 and now represents 40% of all new sign-ups in the 12 ad markets of Netflix. Notably, while Netflix experienced the sixth consecutive quarter of subscriber growth, rival Disney (DIS) has suffered three consecutive quarters of decline in its subscriber base. Wall Street anticipates that Netflix will continue to outpace Disney in terms of subscriber growth, reflecting a reduced competitive threat from the theme park operator. Mittal reaffirms a buy rating on Netflix and raises the price target to $580 from $540. He believes that NFLX deserves a premium valuation compared to peers due to its faster earnings growth, dominant position in streaming, and increased value from its ad-supported tier and paid sharing efforts.

Rivian (RIVN), an electric vehicle (EV) maker, reported 13,972 deliveries in the fourth quarter of 2023, totaling 50,122 EVs delivered in the year. Tigress Financial analyst Ivan Feinseth maintains a buy rating on RIVN stock with a price target of $36, viewing the recent pullback in the stock as an opportunity to invest in this emerging player in the EV market. Despite being down 33.5% in 2024, Feinseth remains bullish on Rivian and highlights multiple catalysts that could drive its growth. These include ongoing production ramp-up, expanded commercial vehicle opportunities, new lease programs, and the upcoming introduction of the R2 platform. Feinseth notes the solid demand for Rivian’s pick-up trucks and SUVs and expects the company to benefit from the increasing demand for its commercial vans. He points to the recent partnership with Amazon (AMZN) and the deal with AT&T (T), where the telecom provider agreed to purchase commercial vans and R1 electric vehicles to reduce its carbon footprint. Feinseth believes that Rivian has a significant first-mover advantage as the leading manufacturer of electric pick-up trucks and SUVs, with a total addressable market of $9 trillion and a service addressable market of over $1 trillion in the next three years.

Despite the volatility in the U.S. stock market, certain companies continue to thrive due to their robust business models and growth potential. ServiceNow, a cloud-based workflow management platform, has exhibited strong financial performance, positioning it as an attractive investment opportunity. Netflix, the streaming giant, has demonstrated resilience and outpaced competitors in terms of subscriber growth, making it a compelling stock for investors. Finally, Rivian, an electric vehicle maker, offers a promising opportunity in the EV market with its strategic partnerships and first-mover advantage. As always, investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.

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