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Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Should Investors Buy Amazon (AMZN) and Nvidia (NVDA) Stocks on the Dip?


Stock market corrections are painful, particularly for growth stocks, but volatile market conditions often allow investors to enter (or buy more of) a stock at an attractive entry point. Right now the markets are looking choppy, but some commentators still hold a year-end rally in sight. “Certainly, it’s a volatile time,” Ned Davis Research’s Ed Clissold told CNBC. Strong quarterly earnings and guidance are keeping him optimistic: “We still think we can get a year-end rally once we get through this weakness here.”

“After such severe selling, there is almost always a retest. We will be watching for signs of a successful retest in the coming days, namely fewer stocks leading to the downside as the popular averages approach or even breach the lows,” Clissold wrote.

In the meantime, Amazon (AMZN) and are Nvidia (NVDA) are looking particularly interesting at current levels. We include TipRanks market data to break down the Street outlook for each of these stocks.

Amazon

  • Down 12% in the month
  • Strong Buy Top Analyst Consensus
  • 24.5% Upside Potential to $2,193 Price Target

E-commerce giant Amazon has slipped recently- but the fundamental outlook remains as strong as ever.

Top Stifel Nicolaus analyst Scott Devit is now out with the stock’s highest price target. At $2,525 he sees price surging over 40% from current levels. That’s not all- Devitt also added the stock to the firm’s elite Select List, bumping out Alibaba in the process. (To watch Devit’s track record, click here)

“We are replacing Alibaba with Amazon on the Stifel Select List in light of greater near-term optimism for Amazon, an uncertain China macro environment, and the opportunity created by recent AMZN price movement” explains Devitt.

Amazon is a leader in two large and rapidly growing markets, eCommerce and cloud services. Moreover, its developing ad business is well-positioned to deliver strong revenue growth over the intermediate- to long-term. “Strong momentum in the higher-margin cloud services and advertising business are elevating the near/intermediate-term margin trajectory for the company” the Stifel analyst writes.

Turning to the future, strategic investments (think Prime membership, emerging geographies and video content) support long-term growth while advancing the company’s leadership position.

Net net, when it comes to Wall Street’s bet, the odds are on this e-commerce giant, with TipRanks analytics showcasing AMZN as a Strong Buy. Out of 41 analysts polled in the last 3 months, 40 are bullish on Amazon stock while only 1 remains sidelined. With a return potential of nearly 24.5%, the stock’s consensus target price stands at $2,193.

Nvidia

  • Down 16% in the month
  • Moderate Buy Top Analyst Consensus
  • 20.5% Upside Potential to $283.64 Price Target

This chip stock has exposure to all the right tech trends, from gaming and artificial intelligence to self-driving cars. Plus new areas in science and medicine should continue to drive increasing demand for Nvidia’s advanced high-speed GPUs.

And now is the perfect time to jump in according to Argus analyst Jim Kelleher. He has kept his Buy rating and $300 price target on Nvidia, indicating 22% upside potential ahead. (To watch Kelleher’s track record, click here)

The stock has been “caught up” in the broader tech selloff. This is on top of potential risks from China-U.S. trade tensions explains Kelleher. However, he recommends taking advantage of the pullback to add to or initiate long positions as Nvidia remains a “preeminent player in the emerging AI and machine learning economy”.

In support of his bullish thesis, Kelleher cites Nvidia’s recent GPU Compute Conference profiling its RAPIDS data science acceleration platform, as well as Volvo picking NVidia Drive AGX Xavier for its production cars starting early in the 2020s.

The Street largely seems to echo Kelleher’s positive sentiment on the GPU hardware giant, considering TipRanks analytics showcase NVDA as a Buy. Out of 28 analysts polled in the last 3 months, 20 are bullish on Nvidia stock, while 8 remain sidelined. With a potential upside of 20.5%, the stock’s consensus target price stands at $283.64.