These 2 Tech Stocks are Still Strong Buys on Wall Street

Despite the tug-of-war between bulls and bears recently, there are still plenty of “Strong Buy” tech stocks in the market, at least according to Wall Street.

Undoubtedly, the bearish calls are getting quieter, with the bulls gaining the upper hand. Though many Wall Street analysts expect only modest upside for the year, I still think tech could have a bit more room to run as 2023 turns into a relief year.

Indeed, chasing rallies in bear markets is never a good idea. However, for investors willing to play the long game, the following analyst-favored stocks seem compelling, given their expected upside potential in 2023.

Therefore, let’s check in with two Strong-Buy-rated technology stocks — UBER and NVDA — that could be slated to ride high on a tech turnaround.

Uber is the ride-hailing company that has not delivered for investors since hitting the public markets back in 2019. At $30 and change, Uber stock is 49% higher than its 52-week high and 54% off its all-time high. The bounce is encouraging, but there’s still a long way to go if Uber stock is to regain the ground lost since peaking in the first quarter of 2021. Regardless, I remain bullish on the name as it looks to improve its profitability over the coming quarters.

Analysts also remain very bullish on the name. They’ve had conviction on the ride down, and I’d be surprised if they don’t continue to favor the name as they steer closer toward GAAP profitability. If Uber is resilient in the face of a recession, I’d look for the firm to stay on course with GAAP profitability in 2024.

Additionally, the third quarter was a mixed bag, but robust demand was encouraging. As the company sails into an economic downturn, there’s a good chance the firm may be (mostly) spared from sales erosion. Ultimately, Ubering is a more convenient way of getting around and is less financially painful than owning and maintaining a vehicle.

Uber’s managers are keen on margin enhancement, and there are reasons to give the firm the benefit of the doubt, even amid the bumps in the road. Whether Uber’s a year (or so) away from becoming a profitable tech titan remains to be seen.

Looking ahead, more potholes should be expected, but after that could be a smoother road as Uber matures. The stock trades at two times sales. That’s far lower than where the stock spent most of 2021 in the 5.2-5.3 times P/S range. The stock’s a year closer to breaking into GAAP profitability and is trading at a fraction of the price.

What is the Price Target for UBER Stock?

As mentioned above, Wall Street loves Uber stock, with a “Strong Buy” consensus rating and 12 unanimous Buy ratings. The average UBER stock price target of $45.36 implies 53.`1% upside potential.

Nvidia is a $477.5 billion GPU (graphics-processing unit) giant that’s leaving the competition in the dust. Despite its recent edge, the stock got ahead of itself in 2021, setting the stage for a painful 64% drop. Like Uber, Nvidia stock sits down around 50% from its peak. At these depths, I remain quite bullish on the stock.

The company is best known by consumers for its gaming-centric GPUs. The firm is more than just a play on gaming hardware, though. OpenAI’s ChatGPT may have marked the start of an unstoppable AI boom. Nvidia could benefit from such a boom, with its advanced chips that can help power supercomputers behind language models like ChatGPT and other advanced AI-leveraging tools. Indeed, Nvidia’s chips reportedly help power hardware that Microsoft (NASDAQ:MSFT) made for its partner OpenAI.

Beyond AI, Nvidia will also benefit from the rise of the metaverse. More 3D objects in a virtual space call for more graphical-processing power, expanding Nvidia’s total addressable market. With an intelligent founder-led CEO at the helm and a vision, the stock is definitely worth a premium price tag.

Like most impressive growth stocks, shares tend to experience moments of overexcitement. With that can come euphoric surges that lead to steep busts. The 1.78 beta indicates NVDA stock is far more volatile than the S&P 500 (SPX).

At 16.5 times sales, Nvidia remains one of the frothier names in big-cap tech. At this juncture, it’s hard to say whether or not such a multiple’s warranted.

What is the Price Target for NVDA Stock?

NVDA stock carries a “Strong Buy” consensus rating. There are 22 Buys, five Holds, and one Sell rating. The average NVDA stock price target of $207.65 implies 8.4% upside potential.

The Takeaway

Despite the ugly past year of performance and recession headwinds ahead, Uber and Nvidia are still Strong Buys, according to Wall Street. Right now, analysts expect far greater gains from Uber stock.

Nvidia’s the more exciting growth story, but Uber’s pushing aggressively to expand margins. In a high-rate world, the latter move could translate to better results for investors.

Disclosure