Analysts Favor Nvidia, But Show Stronger Affection for These 9 Stocks

Analysts Favor Nvidia, But Show Stronger Affection for These 9 Stocks

Tired of hearing investors and analysts gush over Nvidia stock? It’s definitely a popular S&P 500 stock, but by no means the favorite.




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Nine stocks, including industrial Delta Air Lines (DAL), energy firm Targa Resources (TRGP) and consumer discretionary Amazon.com (AMZN), carry a higher percentage of analysts’ buy ratings than Nvidia (NVDA) does, says FactSet. And that’s an important shift now that shares of Nvidia rallied nearly 80% this year as enthusiasm over AI hits a fever pitch.

“The term ‘AI’ was mentioned more than 50 times on the earnings calls of nine S&P 500 companies, led by Nvidia at 114,” says John Butters of FactSet.

Gearing Up For First-Quarter Profit

Analysts are already jockeying for where to find the market’s new opportunities. With the S&P 500 up nearly 10% for the year, analysts are starting to pinpoint favorite stocks in less obvious places.

And that’s as the first quarter proves to be pivotal to justify skyrocketing S&P 500 values. Analysts are calling for S&P 500 earnings to rise 3.3% in the first quarter, Butters says. And if that materializes, it would mark the third-straight quarter of year-over-profit earnings growth, he says.

But analysts have their favorites for stock gains.

Finding The Favorites In The S&P 500

Analysts are generally bullish on S&P 500 stocks at large. But they’re slightly less bullish than normal right now.

Among the 11,557 ratings on S&P 500 stocks, 53.8% of them are buy ratings, Butters says. That’s means they’re slightly more cautious than normal. The percentage of ratings that are buys reached 54.4% over the past five years on average.

Energy is the S&P 500 sector analysts are most bullish on. The number of buy ratings is 63%. And that’s tied with communication services, another popular sector.

And the most popular S&P 500 stocks reflect this sector optimism. Targa Resources, a Houston-based oil and gas supply company, is called rated a buy 95% of the time by analysts. That tops even Nvidia which is rated a buy by 90% of analysts. Additionally, just 5% of ratings on the energy company are a hold and 0% are a sell. And that’s despite the stock already being up more than 22% this year.

Buy These S&P 500 Stocks?

What’s the S&P 500 company with the most buy ratings? That goes to Delta Air Lines. All told, 96% of the ratings on the airline stock are buys and just 4% are a hold. Shares are up 7.3%, trailing the S&P 500 slightly. But analysts remain bullish, saying that its earnings per share will rise nearly 4%.

That’s not to say analysts don’t like Nvidia. It’s just they like other Magnificent Seven’s prospects better. For instance, 95% of all the ratings on Amazon.com are buys. The stock is up 15.2% this year to 175.07. But analysts think it should be worth 204.98 in 12 months. That’s roughly 17% potential upside still. Contrast that with Nvidia, which analysts think is already just 3% away from its 12-month price target.

Do analysts’ favorite S&P 500 always pan out? Absolutely not. But if they’re wrong on these S&P 500 stocks, they’re really wrong.

Analysts’ Biggest Buy Recommendations

CompanySymbolBuyHoldSellYTDSector
Delta Air Lines (DAL)96%4%0%7.2%Industrials
Targa Resources (TRGP)95%5%0%22.0%Energy
Amazon.com (AMZN)95%5%0%14.7%Consumer Discretionary
Microsoft (MSFT)95%5%0%10.7%Information Technology
Schlumberger (SLB)94%6%0%1.7%Energy
Lamb Weston Holdings (LW)93%7%0%-5.7%Consumer Staples
Alexandria Real Estate Equities (ARE)92%8%0%-2.3%Real Estate
NiSource (NI)92%8%0%-0.2%Utilities
Uber Technologies (UBER)90%10%0%23.6%Industrials
Nvidia (NVDA)90%10%0%77.3%Information Technology
Sources: FactSet, S&P Global Market Intelligence, IBD

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