Successful investing is about building the right portfolio, filling it with stocks that will generate solid returns over the long term. Sounds simple, right? The only “trick” is finding stocks that fit that profile, and the key is right in front of us, in the raw stock market data.
This is where the problem lies. Markets generate a huge volume of information, based on thousands of traders trading thousands of stocks – the result is millions of trades every day, and it’s a lifetime’s work to make sense of it all . Even the best Wall Street analysts typically focus on one segment of the whole.
This is where TipRanks Smart Score It is a sorting and data collection tool, based on a combination of AI and natural language processing, designed to gather all the data on a given stock and then compare the performance of that stock to a set of factors called precise predictors of future outperformance. . The results of the stock comparison are then distilled into a single rating, on a scale of 1 to 10. A stock that achieves a “perfect 10” is a stock that has definitely generated additional investor interest.
This is especially true when market-leading companies like Alphabet (NASDAQ: GOOGL) and Alibaba (NYSE: BABA) achieve “Perfect 10” scores. We used the TipRanks database to get an overview of both; These top-rated stocks also bring strong buy ratings and double-digit upside potential. Here are the details.
Alphabet
First of all, a giant in the world of technology. Best known as the parent company of Google and YouTube, Alphabet is the leader in the world of online search and holds a dominant position in online advertising and video content distribution. The company recently became the fourth Wall Street company to surpass $2 trillion in market capitalization, and one of six publicly traded companies with market capitalizations exceeding $1 trillion. Currently, Alphabet is valued at $2.17 trillion.
Given its overall strong position in the technology sector, Alphabet is at the forefront of development in the field of AI and is applying generative AI to its Google search engine and Google Cloud subscription service. Alphabet even has a self-driving division, Waymo, which has installed AI-based self-driving vehicles on the streets of San Francisco.
Financially, Alphabet’s profits have been on an upward trajectory over the past year. In the company’s most recent earnings report, covering 1Q24, Alphabet reported EPS of $1.89, up from $1.17 a year earlier and 38 cents per share better than expected . The company’s revenue, which totaled $80.54 billion and beat forecasts by $1.84 billion, was fueled by advertising revenue. Advertising revenue for the quarter was $61.7 billion, up 13% year-over-year.
All of this – the strong business model, the technology leadership and the solid financials – has caught the attention of Tigress analyst Ivan Feinseth, who writes of Alphabet: “Search and advertising revenues will continue to experience accelerated growth, and the continued integration of AI functionality will continue to strengthen its leadership position across all key technology trends and business sectors. GOOGL continues to benefit from strong advertising revenue and user engagement, driving another quarter of strong results across all key business segments, including Cloud, which continues to benefit from increasing AI integration .
The 5-star analyst goes on to give these stocks a Buy rating with a $210 price target that points to a one-year upside potential of 20%. (To see Feinseth’s track record, Click here)
Like most tech giants, Alphabet has withheld numerous recommendations from Wall Street – as many as 37, with 32 Buys and 5 Holds to support the Strong Buy consensus rating. GOOGL shares are selling for $174.99, and the average target price of $197.53 implies a gain of nearly 13% over the next 12 months. (See GOOGL Stock Forecast)
Ali Baba
Next comes Alibaba, better known as the “Amazon of China”. It’s really a bit unfair. Alibaba is a powerful online retail and services technology company in its own right. The company’s founder is the near-legendary Chinese entrepreneur and technology innovator Jack Ma, and his creation is the absolute leader in China’s domestic online retail market. The company has been in business since 1999 and has expanded beyond China’s borders and beyond e-commerce.
The company offers a wide range of online retail services to the global market and has ventured into other technology sectors, including digital media, entertainment and cloud computing. The company has several business segments, including innovation initiatives, but its core business remains the China trade segment.
This core business gives Alibaba a solid foundation to build on. China has about 1.4 billion people, with about 800 million living in its growing urban regions. In its domestic market, Alibaba offers an unrivaled product range and boasts the ability to deliver anything to anywhere in China, with guaranteed next-day or two-day delivery. The company’s global online retail business includes nearly 6,000 product categories and more than 200,000 suppliers making more than 200 million products available in more than 200 countries.
Alibaba last reported its financial results for fiscal 4Q24, which ended March 31 this year. The company’s revenue was $30.73 billion, up 7% from the fourth quarter of last year and about $310 million above estimates. The company’s net income was reported at $1.40 on non-GAAP measures, missing forecasts by 2 cents per share.
This retail and technology company has drawn the opinion of Benchmark analyst Fawne Jiang, who believes BABA’s strengths outweigh any potential headwinds. Jiang writes: “The key driving factors for the stock’s next step, in our view, are 1) sustainability of positive market share momentum, 2) improving e-commerce monetization through the launch of new advertising products (expected in the second half of 2025) to close the CMR gap. and GMV; and 3) re-accelerated cloud growth driven by cloud AI (F2H25). Uncertainty remains in light of 1) GMV growth is largely dependent on (recently improved) consumer confidence; 2) the investment may create volatility in profitability over the next few quarters and FY25. Net net, we are increasingly comfortable for a potential full-fledged turnaround to occur over the course of the second half of 2025 in a stabilizing macroeconomic context.
For Jiang, another 5-star Street pro, these shares earned a Buy rating, along with a $118 price target that suggests a 45% upside over a one-year horizon. (To see Jiang’s track record, Click here)
BABA’s 17 recent stock reviews include 14 Buys for 3 Holds, for a Strong Buy consensus rating, and the average target price, $103.46, implies a 27% upside from the stock’s current price. share of $81.26. (See BABA Stock Market Forecast)
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Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
