The most upgraded stocks from 2023: buy, sell or hold?

Key Points

• This year's most upgraded stocks rallied at least 55%, with most up triple digits; more gains are expected. 
• The next significant catalysts are Q4 earnings reports due in late January and early February. 
• These stocks have two things in common: a leadership position and AI. 

2023 was a busy year for the analysts; their activity has helped to lift the S&P 500 NYSEARCA: SPY 25% for the year and may help drive it to new highs in 2025. The most upgraded stocks for the year are all up at least 50%, with most up at least 100%, and they may also continue higher. The single thing they all have in common is a leadership position in tech aided by AI, and the AI story is far from played. The theme in 2024 will be the continued expansion of chip-making and cloud capacity and another year of record-setting results for these five stocks. 

Meta Platforms is the most upgraded stock in 2023

Meta Platforms NASDAQ: META is the most upgraded stock in 2023 and a Top Rated stock on the Marketbeat.com platform. This Moderate Buy-rated stock has had 147 upgrades or positive price target revisions in calendar 2023, keeping the consensus rating firm and steady and the price target trending higher. 

The consensus target is up about 130% YOY; the only negative is that it assumes the stock is fairly valued near the current price action. The caveat for sellers is that the high price target and many recently set targets have the stock trading at a new all-time high or another 8% to 15% above the recent action. Meta will report Q4 earnings on January 30th. The company is expected to grow revenue by 22% and more than double its bottom line. 

NVIDIA to have jaw-dropping results in Q4 and 2024

NVIDIA NASDAQ: NVDA is the crown jewel of the AI movement and is expected to see another jaw-dropping year in 2024. This stock is the platform's 2nd most upgraded and Top Rated, Most Followed and Searched name. Its consensus target is still 22% above current action while trending higher, implying another 30% on top of the consensus at the range's high end. 

This suggests a 20% to 50% increase in share prices is likely over the next few quarters, and the top-end could increase as the Q4 and Q1 results are released. Strength should be expected because of NVIDIA’s market-leading position in the GPU industry, compounded by its lean toward AI services. NVIDIA next reports in mid-February and is expected to grow revenue by more than 300% YOY and earnings by 500%. 

Salesforce.com is still strong at year-end

Salesforce.com NASDAQ: CRM is not only strong at year-end but is showing momentum and is likely to outperform in 2024. The company has been the leader in customer-oriented data and management and cemented that position in 2024. Its lead into AI-powered services is aiding its bottom line and clients with additional gains expected in 2024. The Data Cloud feature unifies data from all sources into a complete picture of customers and trends. It is expected to be a meaningful driver of new client growth and penetration of services. Analysts rate this stock a Moderate Buy with a price target about 30% above the current action. The consensus is increasing; the high price target adds another 35%. 

Microsoft Azure is a goto source for AI infrastructure and service

Microsoft NASDAQ: MSFT had a game-changing year in which enterprises of all sizes turned to Azure for their cloud and AI needs. This company is expected to grow revenue another 15% in Q4 and widen its margin. Analysts rate it a Moderate Buy and see it trading about 5% higher at the consensus. The high price target is another 20% higher and likely to increase as the year progresses. Analysts are raising their Q4 2023 and FY 2024 estimates but have failed to account for the company’s momentum and strength. Microsoft will report next on January 25th; it is a Most Followed, Top Rated and Most Searched name on Marketbeat’s platform. 

Palo Alto Networks: the one cyber security stock to rule them all

Palo Alto Networks NASDAQ: PANW is growing in alignment with the cybersecurity industry, which is saying a lot because it is the largest player by a wide margin. The company is expected to post 18% revenue growth in Q4 with wider margins aided by the company’s robust cash flow and share repurchases. Analysts rate this stock a Moderate Buy, but there is a potential problem. The consensus target lags the market and may weigh on the price action if Q4 results fail to impress. Otherwise, the consensus is trending higher, and the high target implies about 17% upside and a new all-time high.