Conflict in the Middle East has sent the market on a wild ride, but investors with a long-term horizon ought to look past short-term disruptions to find compelling stocks.
Choosing the right stocks can be challenging due to the vast universe of equities available. Investors can consider the ratings of top Wall Street analysts as they make informed decisions on their portfolios.
Here are three stocks favored by some of Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Lumentum Holdings
This week’s first pick is Lumentum Holdings (LITE), which provides optical and photonic technologies to power artificial intelligence data centers and next-generation communications. LITE shares have seen a phenomenal rise over the past year, driven by AI-led demand for the company’s optical networking and related components.
Following the investor briefing at the Optical Fiber Communication (OFC) Conference and related meetings, JPMorgan analyst Samik Chatterjee reiterated a buy rating on Lumentum stock and boosted the price target to $950 from $565. The analyst said that the event and the meetings provided stronger-than-anticipated clarity into future demand across various growth drivers.
Chatterjee sees increased confidence across multiple fronts, with the company highlighting new deals and capacity expansions, strengthening belief in the upgraded financial outlook. Specifically, the analyst noted greater visibility into the impressive expansion of the opportunity for optics in scale-up networks, including significant growth drivers in co-packaged optics (CPO) and optical circuit switches (OCS).
The five-star analyst added that growing demand in scale-up networking is giving confidence in continued strength in future earnings, encouraging investors to look beyond 2027 and factor in these opportunities. Overall, Chatterjee expects 2027 earnings per share (EPS) of $24, with upside above $25. Looking ahead, he expects strength in scale-up networking to push earnings beyond $36 in 2028, with the potential for further upside from more OCS customers, higher margins, and controlled costs.
Also, Chatterjee feels that his upgraded price target and higher-than-historical average multiple is “justified given benefits from demand relative to AI investments.”
Chatterjee ranks No. 8 among more than 12,100 analysts tracked by TipRanks. His ratings have been profitable 71% of the time, delivering an average return of 44.8%. See Lumentum Holdings Financials on TipRanks.
Broadcom
Moving on to chipmaker Broadcom (AVGO), which is gaining from AI-led demand for its products. The company last week announced a multi-year deal with Meta Platforms to support the social media giant’s rapidly growing AI compute infrastructure. Prior to this, Broadcom entered into expanded partnerships with Google and Anthropic.
Following the Meta deal, Benchmark analyst Cody Acree reiterated a buy rating on Broadcom stock with a price target of $485. Acree stated that the Meta deal significantly increased his confidence about AVGO’s ability to surpass its prior target of delivering more than $100 billion in AI chip revenue in fiscal 2027, as it provides a clearer timeline and deployment visibility into one of the company’s largest custom XPU (AI accelerators) programs.
The five-star analyst noted that increased conviction builds on management’s prior commentary on AVGO’s custom XPU business now spanning six customers, with further upside expected from Google’s next-generation TPUs (tensor processing units) and Meta’s MTIA (Meta Training and Inference Accelerator) roadmap. Also, AVGO’s XPU business is expected to gain from Anthropic scaling from 1 GW this year to over 3 GW in 2027 and OpenAI’s deployment of its first-generation XPU in 2027 at more than 1 GW of compute capacity.
Interestingly, Acree believes that the Meta partnership agreement is not just limited to a typical ASIC design win. Broadcom is now involved in multiple generations of AI accelerator chip designs, advanced packaging, and networking, which is expected to drive its content per deployment higher while making it harder for Meta to switch suppliers.
Additionally, Acree observed that the deal involves an initial 1 GW+ commitment, with plans to scale to multi-gigawatt deployment over time. This establishes that hyperscale AI infrastructure is now being built at utility scale, boding well for companies like Broadcom that offer both custom chips and rack-scale networking solutions.
Acree ranks No. 71 among more than 12,100 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, delivering an average return of 29%. See Broadcom Insider Trading Activity on TipRanks.
Dell Technologies
Dell Technologies (DELL) is also benefiting from the demand for AI infrastructure. Notably, the ongoing AI boom is driving demand for the company’s servers. Recently, Mizuho analyst Vijay Rakesh increased his price target for Dell stock to $215 from $180 and reaffirmed a buy rating.
While Rakesh acknowledges that Super Micro Computer (SMCI) is the leader in the AI server technology space, he expects Dell to gain from some shift in orders from SMCI amid the indictment of its former workers for illegal shipments of Nvidia-powered servers to China. Super Micro was not named as a defendant in the case. The five-star analyst expects this near-term headwind related to rival SMCI to benefit Dell, which has a 10-times larger AI server service and support team and a solid balance sheet to support its estimated $85 billion five quarter pipeline.
Rakesh now expects Dell’s fiscal 2027 and 2028 server orders at $53 billion and $68 billion, respectively, up from the prior estimates of $50 billion and $61 billion. His revised estimates indicate that Dell could gain from a demand/sentiment shift around the AI server landscape.
Additionally, Rakesh expects Dell to gain from higher spending by major cloud service providers (CSPs) and CoreWeave. Notably, capex is now estimated at $689 billion for 2026, reflecting 64% year-over-year growth, with 2027 and 2028 capex projected to increase by 18% and 10%, respectively, to reach $888 billion.
The analyst also expects Dell’s share in the AI server market to rise from 19% in 2025 to 25% in 2029. Rakesh expects the company’s market share to be driven by its “scale, balance sheet, and well-developed supply chain.”
Rakesh ranks No. 14 among more than 12,100 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 51.1%. See Dell Technologies Ownership Structure on TipRanks.
This post was originally published on CNBC Markets
