Top Wall Street analysts are optimistic about the growth prospects of these 3 stocks

Investors had a volatile end to January as they weighed the Federal Reserve’s pause on rate cuts, a busy earnings season and the prospect of new tariffs.

Given these dynamics and the volatility in the stock market, it could be difficult for investors to pick the right stocks for their portfolios. Tracking the recommendations of top analysts could be helpful in this regard, as they look beyond short-term noise and focus on companies’ long-term growth potential.

With that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Netflix

We start with streaming giant Netflix (NFLX). The company recently impressed investors with better-than-anticipated results for the fourth quarter of 2024, reporting about 19 million subscriber additions.

Reacting to the stellar Q4 print, JPMorgan analyst Doug Anmuth reiterated a buy rating on NFLX stock and boosted the price target to $1,150 from $1,000, saying “NFLX enters the new year firing on all cylinders.”

Anmuth added that Netflix is gaining from a very solid content slate. While the Jake Paul and Mike Tyson fight, the Christmas Day NFL games and the second season of “Squid Game” were major content releases in Q4, the analyst noted the company’s commentary that these three together accounted for only a small percentage of the overall subscriber additions and that the robust additions were driven by broad content strength.

The analyst also highlighted that Netflix is witnessing enhanced engagement per member household and encouraging retention. Reacting to the company’s decision to raise prices, Anmuth expects only a little pushback in the U.S. and a few other markets, given the strong content. Looking ahead, the analyst believes that the story this year will shift more towards advertising, with the company gearing up to pursue several initiatives.

Overall, Anmuth is bullish on Netflix based on double-digit revenue growth estimates for 2025 and 2026, operating margin expansion, its dominant position in streaming, and expectations of a multi-year rise in free cash flow. He now expects 30 million net additions in 2025 compared to the previous estimate of 21 million. The analyst also increased his revenue estimates for 2025 and 2026 by 4% and raised his operating profit estimate for both years by 13%.

Anmuth ranks No. 80 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 63% of the time, delivering an average return of 20%. See Netflix Hedge Fund Activity on TipRanks.

Intuitive Surgical

This week’s second stock pick is Intuitive Surgical (ISRG), a pioneer in robotic-assisted surgery and the maker of the popular da Vinci surgical systems. The company ended 2024 on a strong note, with market-beating earnings. However, ISRG’s gross margin guidance for 2025 fell short of expectations and indicated contraction compared to 2024.

In reaction to the results, JPMorgan analyst Robbie Marcus reaffirmed a buy rating on ISRG stock and increased the price target to $675 from $575. The analyst noted the company’s upbeat profitability metrics and explained that the revenue beat was driven by solid gross system placements and procedure growth.

In particular, Marcus noted the placement of 174 da Vinci 5 systems in Q4 2024, way ahead of JPMorgan’s estimate of 125. “With strong momentum from dv5 heading into 2025 and a setup for another year of beat-and-raise quarters, we remain bullish on Intuitive and reiterate our Top Large Cap Pick,” he said.

Commenting on the 2025 outlook, Marcus stated that Intuitive Surgical’s gross margin guidance of 67% to 68% slightly lagged JPMorgan’s and the Street’s estimate of about 68.5%. However, the analyst contended that while the gross margin guidance miss triggered some concerns, he sees the outlook as conservative, with a possible upside just as seen in 2024. He highlighted that ISRG’s 2024 initial gross margin outlook was 67% to 68%, but it then ended the year favorably with a gross margin of nearly 69%.

Overall, Marcus thinks that Intuitive Surgical is well positioned in the rapidly growing, underpenetrated soft-tissue robotics space. He expects the introduction of new systems and approval of the use of ISRG’s systems in new procedures to drive future expansion.

Marcus ranks No. 683 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 56% of the time, delivering an average return of 11.2%. See Intuitive Surgical Ownership Structure on TipRanks.

Twilio

Finally, let’s look at the cloud communications platform Twilio (TWLO). Goldman Sachs analyst Kash Rangan upgraded TWLO stock to buy from hold and increased the price target to $185 from $77 following the company’s analyst day event and ahead of the fourth-quarter results in February.

“Following multiple years of growth compression and several strategic actions, we believe Twilio is now hitting an inflection point both in terms of narrative and fundamentals,” said Rangan, explaining the reason behind his rating upgrade.

Further, Rangan expects solid free cash flow generation, supported by Twilio’s aggressive cost reduction and efficiency measures. Rangan added that TWLO’s analyst day reinforced his optimistic view, thanks to accelerated product velocity and an improved go-to-market strategy.

The analyst thinks that enhancements to the company’s Communications portfolio can help Twilio expand its already dominant position in the core CPaaS (communications platform as a Service) market. He thinks that following robust Q3 results, there is still notable upside in TWLO stock, driven by the company’s strategic actions over the past two years.

Also, Rangan sees a possible upside to the calendar year 2025 revenue growth estimates, given inflecting usage trends in communications and new product cross-sell opportunities, backed by core platform enhancements and generative AI innovations.

Rangan ranks No. 345 among more than 9,300 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 11.4%. See Twilio Stock Charts on TipRanks.