The possibility of multiple rate cuts this year is expected to boost investor sentiment for growth stocks. Despite macro headwinds, several growth stocks fared better than the broader market in 2023, as their strong execution helped navigate a challenging demand backdrop. Using a TipRanks’ Stock Comparison Tool, we placed Uber (NYSE:UBER), Palantir (NYSE:PLTR), and Trade Desk (NASDAQ:TTD) against each other to pick the most attractive growth stock as per Wall Street pros.
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Uber Technologies Stock (NYSE:UBER)
Uber Technologies stock has jumped nearly 120% over the past year. The ride-hailing and food delivery platform delivered GAAP profit for the first time in the second quarter of 2023 and maintained the profitability streak in Q3 2023 as well.
Moreover, CEO Dara Khosrowshahi highlighted that Uber witnessed an acceleration in its Q3 gross bookings, trips, and monthly active platform consumers. The company is focused on improving its GAAP operating income and free cash flow, backed by solid demand and cost discipline. Also, the company’s extensive network, diversified business model, and improved profitability give it an edge over its closest rival, Lyft (NASDAQ:LYFT).
What is the Prediction for UBER Stock?
Last month, analysts at William Blair named Uber as one of the most promising large-cap stocks for 2024. The research firm highlighted that Uber is expected to see robust growth and scale this year, with a possible upside in ad revenue.
In particular, William Blair analysts think that ad revenue could be an incremental catalyst if Uber crosses its $1 billion revenue estimate for the year.
With 36 Buys against one Hold, Wall Street has a Strong Buy consensus rating on UBER stock. The average price target of $65.83 implies nearly 9.2% upside potential.
Palantir Technologies Stock (NYSE:PLTR)
Shares of data analytics company Palantir have rallied more than 152% over the past year. The company impressed investors by generating improved profits in recent quarters. Additionally, investors are optimistic about the company gaining from artificial intelligence (AI)-related tailwinds.
There is a lot of optimism about Palantir’s recently launched Artificial Intelligence Platform (AIP) offering. In fact, the company attributed the reacceleration in its commercial business growth in Q3 2023 to the growing demand for AIP. Additionally, the company’s commercial business grew at a faster growth rate of 23% in Q3 2023, compared to the 12% growth in the government business.
What is the Target Price for Palantir Stock?
On January 5, Jefferies analyst Brent Thill downgraded Palantir stock from Hold to Sell and reduced his price target to $13 from $18. The analyst acknowledged that the company has a “particularly wide technology moat” and a data platform that can handle complex mission-critical use cases that rivals cannot. That said, he is concerned that PLTR stock has jumped to unsustainable valuation levels due to the ongoing AI buzz with no monetization strategy in place.
While Thill continues to believe that the company has the potential to grab further share in an underpenetrated and large total addressable market (TAM), he thinks that there is higher risk than reward at current levels.
Overall, Wall Street is sidelined on Palantir stock, with a Hold consensus rating based on four Buys, four Holds, and six Sells. The average price target of $13.36 for PLTR stock implies a possible downside of 18.5% from current levels.
Trade Desk Stock (NASDAQ:TTD)
Trade Desk, a cloud-based tech platform, helps ad buyers create, manage, and optimize digital advertising campaigns across ad formats and devices. TTD shares have gained around 56% over the past year.
TTD issued underwhelming fourth-quarter guidance in November, which dragged down its stock. The company said its guidance was lower than the consensus estimate due to “transitory cautiousness in certain verticals” like U.S. auto and media/entertainment. These verticals were impacted by strikes.
Despite ongoing pressures, several analysts remain optimistic about Trade Desk’s long-term prospects. They expect the company to benefit from AI-related tailwinds and an anticipated improvement in ad spending as the macro backdrop improves.
Is TTD Stock a Good Buy?
Earlier this month, Loop Capital analyst Rob Sanderson maintained a Buy rating on Trade Desk with a price target of $92 and called the stock his firm’s Top Pick in 2024 in the Internet advertising/SaaS (software as a service) space.
Sanderson believes the company has strong fundamentals, reliable network effects, and a widening competitive moat. He added that aside from robust secular drivers like the rise of connected TV, retail media, and international expansion, the framework into 2024 is also attractive for Trade Desk, given a solid product driver – its new media buying platform Kokai.
Further, Sanderson expects the company to gain from cyclical catalysts, including U.S. elections and a rebound in autos.
Trade Desk earns Wall Street’s Strong Buy consensus rating based on 19 Buys and one Hold. The average price target of $82.69 implies about 21% upside potential.
Conclusion
Wall Street is bullish on Uber and Trade Desk but remains sidelined on Palantir. Analysts expect higher upside potential from Trade Desk than the other two growth stocks. Interestingly, as per TipRanks’ Smart Score System, Trade Desk scores a “Perfect 10,” which implies that the stock has the capability to outperform the broader market over the long term.
