We’re increasing our price targets on a handful of positions that have recently made new all-time highs and another that has made a nice comeback. Amazon, Alphabet, Meta Platforms, and the rest of mega-cap tech stocks have been powering the market lately, and we think there is more room to run thanks to their generative artificial intelligence tailwinds and profitability discipline. Eli Lilly will also continue to run as the most valuable drug company in the world keeps adding reasons to buy the stock beyond its massive diabetes and weight loss portfolio. Palo Alto Networks, which is the only one not at new highs, has made such a recovery that signals more good times ahead for the cybersecurity leader. AMZN YTD mountain Amazon YTD We begin with Amazon ‘s move, which has been fueled by strength in its three core businesses. We think Amazon Web Services cloud revenue can accelerate. A survey of chief information officers conducted by Jefferies showed that 43% of CIOs in the United States plan to increase their cloud spending by more than 10% in 2025. Spending on AI should be a tailwind, too. Amazon’s e-commerce margins are improving through a reduction in the cost-to-serve and a fast-growing advertising business with some of the highest margins despite increased content investment. We are increasing our Amazon price target to $220 per share from $200. GOOGL YTD mountain Alphabet YTD Alphabet has been gaining steam in recent months on similar cloud tailwinds but also improving sentiment around its AI capabilities. Also supporting shares of the Google parent is a solid digital advertising environment that continues to take dollars from traditional ad channels. We are increasing our Alphabet price target to $210 from $190. META YTD mountain Meta Platforms YTD Meta Platforms ‘ stock has fully recovered all of its first-quarter earnings losses. Shares of the Facebook and Instagram owner sold off hard in April as investors were concerned that all those billions of dollars spent on AI were not leading to revenue. But what the Street missed was how AI has improved engagement on its Family of Apps and increased efficiencies for advertisers. We are increasing our Meta price target to $560 from $525. In recognition of Meta’s run, we slightly trimmed our position Monday. LLY YTD mountain Eli Lilly YTD We are also increasing our Eli Lilly price target – taking it to $1,000 per share from $850. There’s been a handful of positive updates since late May, sending shares to record levels. The company announced it has more than doubled its investment in an Indiana manufacturing site to increase output of its blockbuster GLP-1 drugs Mounjaro for diabetes and Zepbound for weight loss. There were also positive studies for MASH and obstructive sleep apnea , and donanemab received FDA approval for the treatment of early symptomatic Alzheimer’s disease. The company on Monday expanded its immunology portfolio by acquiring Morphic for $3.2 billion . These events added together have helped put the company on a trajectory to reach a $1 trillion stock market value . PANW YTD mountain Palo Alto Networks YTD One more stock we’re raising our price target for is Palo Alto Networks . The cybersecurity stock may not have taken out its 52-week high, but it has made a nice move since the start of June, rallying roughly 12%. We think this is a sign of two things. First is that demand remains solid due to the elevated threat environment. When CDK Global was hacked last month, bringing down thousands of auto dealerships across the company, Palo Alto Networks was brought in to help restore operations. Second is additional comfortability around the company’s platformization strategy, which has spooked investors due to the billing headwinds. What management believes is the better indicator of how the business is performing is its remaining performance obligation, or RPO. It showed an uptick in growth last quarter . We’re taking up our price target to $360 from $320. Like Meta, we trimmed Palo Alto Networks Monday. (Jim Cramer’s Charitable Trust is long AMZN, GOOGL, META, LLY, PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
We’re increasing our price targets on a handful of positions that have recently made new all-time highs and another that has made a nice comeback.
Read the full article here
News Room
