The Most Upgraded Stocks From The Q1 Earnings Season

Key Points

• The Q1 reporting season is over, and these stocks are the winners regarding analysts' sentiment. 
• Meta Platforms, Microsoft, NVIDIA, and Salesforce.com are all supported by the push to AI. 
• The consensus price targets lag behind price action, but the analysts are leading the markets higher. 

With the Q1 earnings reporting season all but wrapped up, it's time to start looking at the winners and losers from the period. The takeaway from the season is that results are spotty across sectors and industries, and the outlook for the 2nd half of the year continues to trend lower. The strongest sentiment regarding the analysts and their sway is in the tech sector, although fast food also stands out on Marketbeat’s list of Most Upgraded Stocks.

The top of the list includes Meta Platforms NASDAQ: META, Microsoft NASDAQ: MSFT, NVIDIA NASDAQ: NVDA, and Salesforce.com NASDAQ: CRM, which have more in common than you might think. While these names drive shareholder value under their own force, they are also leaders in the push toward AI, which will help sustain an upward trajectory for share prices for the foreseeable future. 

Meta Platforms: Vee-Bottom Recovery Gains Momentum

Meta Platforms is rebounding due to a shift in the company strategy. Now, instead of growth at whatever cost, the company is focused on efficiency and improved profitability, which is what investors want to hear. The company has reorganized and laid off thousands of employees in that effort.

Coupled with a rebound in user metrics, this points to good things for investors. Add in Meta’s push into AI, and that long-term trajectory for revenue and earnings becomes clearer. AI services and entertainment, such as what Meta offers, will be the fastest-growing and largest segment of the AI market once the initial boom is over. 

And the analysts are driving the stock higher. Meta Platforms has a jaw-dropping 50 analysts with current ratings, and all have produced at least 1 upgrade or price target increase since the beginning of Q1 reporting. They have the stock pegged at a Moderate Buy with a price target of $245.

That’s below the current price action, but the last time someone set a target below consensus was in February. The bulk of recent targets are in the range of $275 to $350, which is the new high target. The low end of that range is worth about 3.5%, with shares near $265. 

Microsoft: Embedding AI Across Its Network 

Microsft is the 2nd most upgraded stock from Q1 reporting with 49 fresh updates. These were sparked by the company’s Q1 outperformance and guidance, which points to growing market share in cloud and cloud services. Also, the decision to embed AI into services helped to spur analysts' sentiment. The 36 analysts with current ratings think the stock is a Moderate Buy with a price target that implies fair value at current price points. This target is trending higher, and most recent targets are above consensus. This trend has the consensus figure at a new all-time-high which may be reached by early summer. 

NVIDIA: Game-Changing Guidance For NVIDIA 

NVIDIA’s Q2 guidance was so mind-boggling big it caused a paradigm shift in the market. The move to upgrade over a trillion dollars in infrastructure (and NVIDIA’s position as the leader in AI chip technology) will ensure it sustains a higher level of revenue for many quarters to come. This catalyzed 22 price target increases from 37 analysts making 47 updates for the period. They rate the stock a Moderate Buy and are lifting the consensus target. The consensus is below the current price action but trending higher, and most of the new targets have the stock moving upward, not downward. 

Salesforce.com: A Dual-Tailwind For This Stock 

Salesforce.com was growing due to its leadership position as a CRM company. That is boosted by its use of AI, which makes it a leader in AI services, which shows in the analyst activity. The stock has 31 updates from 36 analysts to put it in the 4th spot for Most Upgraded stocks. They rate it a Moderate Buy, which is steady compared to last year, and the price target is trending higher. The price target is below consensus like the others, but, also like the others, the most recent activity has the stock trading well above consensus and approaching record-high levels.