More and more, the companies that we cover on Wall Street are starting to agree that while the future’s still reasonably bright for the U.S. economy, it may be one of stock market gains that are much lower than the norm has been over the past 10 years. When that is the case, then investing strategies often shift from indexing to a more disciplined stock-picking routine, and that’s when investors need solid growth ideas.
Jefferies highlights the firm’s top growth stocks to buy each week, and this week is no exception. While these stocks are much better suited for accounts that have a higher risk tolerance, they all make good sense now, as they all have outstanding upside potential and are among the Jefferies top U.S. growth calls for this week.
AMD
This top company appears to have turned the corner, and it had some solid news this week. Advanced Micro Devices Inc. (NYSE: AMD) is one of the largest suppliers of PC microprocessors and graphics processors worldwide to computing original equipment manufacturers. The company’s main product lines include desktop, notebook and graphics processors, and embedded/semi-custom chips.
Last year the company released its first major offering in five years, the Ryzen chipset, which many feel is uniquely positioned to compete with the big players like Intel and Nvidia in the $50 billion total addressable market for personal computers, gaming, artificial intelligence and servers.
Shares rose in the spring on the back of Google’s announcement concerning Stadia at this year’s game developers conference. The AMD CEO had noted that Google’s cloud gaming platform was using AMD Radeon GPUs, and the close partnership now has expanded with Google, as the search giant is using the AMD 2nd Gen Epyc processors in its data centers.
Jefferies has a $38 price target for the shares, while the Wall Street consensus target is lower at $33.18. The stock closed Wednesday at $31.85 a share.
Match
Jefferies continues to love this company, and its shares have really backed up. Match Group Inc. (NASDAQ: MTCH) is the worldwide leader in online dating products in terms of revenue, monthly active users and paid members. Its portfolio of dating sites includes several of the most popular products such as Match, Meetic, OKCupid, Tinder, POF and Twoo. It has four of the top-five highest-grossing dating apps in North America and three of the top-five worldwide.
With ever more Millennials turning to online dating, the prospects for this company are incredibly strong. Toss in the computer literacy of young Americans, and it makes sense that the stocks in this area would show robust growth. Some top analysts on Wall Street feel that as much as a stunning 50% of all dates will begin online by 2022.
The Jefferies report noted this:
The hares have pulled back ~23% from post-second quarter highs and while the IAC distribution is likely to remain a near-term headwind; we think it could be a positive for shares long-term. Our latest Tinder data checks (Apple App store ranking and Android downloads) remain positive and supportive of the company’s commentary for 400,000+ sequential subscriber adds in the third quarter. Facebook recently rolled out its dating product in the US, though our survey conducted earlier this year suggests that most users do not wish to commingle dating with social media. We reiterate our Buy-rating on and believe the company can continue to post double-digit revenue growth.
The massive $105 Jefferies price target compares with the $58.12 consensus target. The stock closed at $54.31 per share on Friday.
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