Analyst calls can be a useful source of information. That’s because analysts spend their time studying companies, speaking with executives, and tracking industry trends.
Their recommendations are not always right, but their research can offer clues about what could drive a stock higher or what risks investors should be watching. The key is to use analyst calls as a research tool, not as a sole reason to go long or short.
Analysts Can Help Explain What Happened After Earnings
Earnings reports hold a substantial amount of information. A company might report strong revenue growth, beat Wall Street’s expectations or provide an optimistic outlook, but figuring out what matters most can be difficult.
That’s where analyst commentary can help.
For example, Bank of America (NYSE: BAC) recently reiterated its Buy rating on Affirm after the company’s earnings report. The bank also raised its price target to $104 per share from $93. Bank of America called Affirm (NASDAQ: AFRM) a “best-in-class compounder” and said the company still has room to grow. The important part isn’t necessarily whether Affirm reaches the $104 price target. Instead, the analyst’s decision to raise the target tells investors that the firm’s view of the company’s future has improved following the latest results.
Analyst Calls Can Highlight Growth Trends
Analysts can also help investors understand the bigger trends affecting a company.
Bank of America recently reiterated its Buy rating on Marvell Technology (NASDAQ: MRVL), saying the company has “rare accelerating growth.” The firm sees Marvell’s revenue growth potentially accelerating toward the mid-50% range year over year. It pointed to the company’s relationships with major cloud customers and its technology across areas including computing, networking, optics, security and storage.
For investors, this provides a useful reminder that Marvell isn’t simply a semiconductor company. It is also positioned to benefit from growing demand for cloud computing and artificial intelligence infrastructure.
Companies entering new markets
Tesla is a good example.
Bank of America reiterated its Buy rating on Tesla (NASDAQ: TSLA) while discussing the company’s robotaxi business. The firm’s research suggested that Tesla’s robotaxis are well positioned on pricing, although customers may face longer waiting times than with some competitors.
Bank of America believes Tesla may be keeping prices relatively low as it gathers more data and expands its robotaxi network. For investors, that information provides another way to think about Tesla’s autonomous-driving ambitions. Robotaxis are still a developing business, so traditional financial numbers don’t tell the entire story.
Surveys Can Provide a Different Perspective
Sometimes the most interesting analyst research doesn’t come directly from a company’s earnings report. Evercore ISI (NYSE: EVR) recently raised its price target on Amazon (NASDAQ: AMZN) to $355 per share from $315 after conducting its annual online retail survey. The firm also maintained its Outperform rating. One finding stood out: Evercore said its survey provided the first evidence that agentic artificial intelligence could actually be helping Amazon’s retail business.
According to the firm’s research, 57% of Alexa AI users surveyed had purchased a product they weren’t previously aware of. That’s potentially important because it gives investors an idea of how consumers are actually using new AI tools not just how much a company is spending on AI.
Wall Street analyst calls shouldn’t replace an investor’s own research. But they can make that research more efficient. By following analyst ratings, price-target changes and the reasons behind those decisions, investors can get a better sense of what professional researchers are watching.
