Tech Stocks Gaining Favor Among Wall Street Analysts

High valuations for artificial intelligence stocks were a hot topic this week, as fears of a potential AI bubble weighed on investor sentiment. However, Wall Street analysts remain optimistic about several tech stocks, viewing them as fundamentally strong and capable of delivering rapid growth driven by AI.

According to CNBC, top Wall Street analysts have identified three key stocks with favorable long-term growth outlooks: Amazon, Alphabet, and Advanced Micro Devices. Starting with Amazon, the e-commerce and cloud computing giant recently reported impressive Q3 results, particularly in its Amazon Web Services, or AWS, segment.

Analyst Lloyd Walmsley from Mizuho raised his price target for Amazon to $315 from $300 and reaffirmed a buy rating, citing strong performance and a promising partnership with OpenAI. Walmsley noted that AWS revenue growth is expected to accelerate to 22% in early 2026, driven by improvements in Amazon's retail and logistics operations.

He believes investor interest in Amazon will continue to grow, especially with the upcoming AWS ReInvent Conference in December. Next, Alphabet, the parent company of Google and YouTube, also posted better-than-expected Q3 results, surpassing $100 billion in quarterly revenue for the first time.

JPMorgan analyst Doug Anmuth increased his price target for Alphabet to $340, highlighting AI's positive impact on its cloud business. Anmuth pointed out that the company is seeing accelerated query growth and higher conversion rates from its AI features, suggesting that fears surrounding Google's AI search transition may be unfounded.

He remains confident in Alphabet's potential, labeling it as a top investment idea. Finally, Advanced Micro Devices, or AMD, reported strong Q3 earnings, driven by growth in its AI data center segment.

Analyst Ruben Roy from Stifel raised his price target for AMD to $280, citing increased demand for server CPUs. Roy is optimistic about AMD's future, particularly with partnerships with OpenAI and Oracle Cloud Infrastructure that are expected to enhance its data center AI business.

He anticipates AMD's data center AI GPU revenue to reach between $6 billion and $6.5 billion in FY25, aligning with the company's growth trajectory. Overall, the favorable outlook from Wall Street analysts highlights a positive trend for tech stocks in the face of economic uncertainty, reinforcing confidence in the sector's growth potential moving forward.