The stock market had a strong day on Thursday, as investors were generally pleased with the pace of the economic recovery even with some mixed data on gross domestic product and employment. As of 1:30 p.m. EDT, the Nasdaq Composite (NASDAQINDEX: ^IXIC) rose about half a percent, consistent with other major market benchmarks.
Yet a couple of stocks that trade on the Nasdaq stood out for their gains. Tesla (NASDAQ: TSLA) has always been a controversial company, but it got a vote of confidence from analysts who had previously been extremely bearish on the electric vehicle stock. Meanwhile, Zoom Video Communications (NASDAQ: ZM) also got praise for its past growth and future prospects. Below, we'll look more closely at why Tesla and Zoom led the Nasdaq higher.
Image source: Getty Images.
Tesla has one analyst going from 0 to 60
Shares of Tesla were up nearly 5% on Thursday afternoon. The electric vehicle pioneer managed to persuade one former naysayer to change its mind about the company's prospects, and investors took that as another sign of Tesla's inevitable dominance.
Analysts at DZ Bank had been quite negative on Tesla, having issued a sell rating on the stock. However, on Thursday morning, DZ made a rare double upgrade, moving all the way to a buy rating. It also set a price target of $750 per share on the stock, implying upside of about another 10% for the share price. DZ's previous price target had been $320 per share.
Yet there are still plenty of analysts who still aren't convinced about Tesla's future. Citi boosted its price target on Tesla earlier this week, but only to $209 per share, or roughly 70% below current levels. It kept its sell rating on Tesla. Similarly, at Needham, analysts reiterated an underperform rating, arguing that the stock price is still too high despite ongoing progress in Tesla's underlying business.
Tesla managed to crush expectations with its most recent financial report, and that has long-term investors excited. The electric vehicle company will never convince everyone, but those who bought shares early on have thus far had the last laugh.
Zoom makes a move higher
Meanwhile, shares of Zoom Video Communications were also up by around 5%. The video collaboration platform provider got an upgrade that bolstered enthusiasm about the stock.
KeyBanc got things going with an upgrade from sector weight to overweight, setting a $428 per share price target on the stock. Analysts believe that the remote work movement is here to stay, with offices likely to take on a hybrid model in which video collaboration becomes an essential part of keeping work teams in touch with each other. That in turn should make corporate spending on video and cloud-based communications a priority, which could be the growth path that many investors have worried Zoom didn't have once the pandemic started to ease.
KeyBanc is also optimistic about the pending acquisition of Five9 (NASDAQ: FIVN). Integrating Zoom functionality with call centers could be a revolutionary advance, and it could also help diversify the scope of Zoom's overall business.
Zoom's stock remains well below its all-time highs, as investors wait to see if the company will flame out once economic activity returns to more normal conditions. If analysts have their way, however, Zoom could have plenty of future growth ahead to defy naysayers and get the stock moving upward once again.
10 stocks we like better than Tesla
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Tesla wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 7, 2021
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.