Q2's Most Upgraded Stocks (And No, NVIDIA's Not on the List)

With the FQ1 earnings reporting cycle wrapped up and eyes turned to the FQ2 results, it’s time to take a look at where the analysts' attention is focused. The initial takeaway from MarketBeat’s screener for Most Upgraded Stocks is that market leadership appears to be shifting. No longer are NVIDIA (NASDAQ: NVDA), Meta Platforms (NASDAQ: META), or Microsoft (NASDAQ: MSFT) topping the ranks, but new names, including mid-cap tech and a consumer turnaround story, are in their place.

This is a look at the three most upgraded stocks from the FQ1 reporting cycle, calendar Q2, and where analysts think their stock prices are heading in the back half of the year. 

Zscaler Scales the Ranks, Claims Top Spot 

Zscaler’s (NASDAQ: ZS) FQ3 report affirmed its position in the cloud security arena. The company revealed slow growth, but growth was better than expected, sustaining a low-20% pace and compounding the news with solid guidance. The outlook is for sustained 20% growth, firm margins, and cash flow sufficient to maintain a healthy balance sheet while building shareholder equity. 

Regarding the analysts, MarketBeat tracks 35 positive revisions in the preceding 12 months, primarily issued following the release, either lifting their price target, sentiment rating, or both. They rate the stock collectively as a Moderate Buy, with the amount of coverage rising, and the consensus price target trending higher.

The consensus in mid-June is near $295, a slight decline compared to the price action, but it rose nearly 25% in the month following the earnings report, with the high-end range indicating a 30% upside relative to it. 

The price action in Zscaler shares is bullish in Q2. The market is rallying strongly and forming a bullish flag pattern as the quarter draws to a close. Assuming the pattern is confirmed with a break to higher prices, this market could rise by $150 based on technical indications and reach the $450 level before the end of the year.

Snowflake Claims Second Position: Shares to Hit Multi-Year High by the End of the Year

Snowflake’s (NYSE: SNOW) earnings report did two things with one, leading to the other. The first is that it affirmed the decision to change the CEO last year. That decision reinvigorated operations, leading to outperformance and an accelerated innovation pipeline, thereby confirming the long-term outlook. The long-term outlook is for sustained growth in the 20% range with a widening margin. 

Regarding the analysts, MarketBeat tracked 27 positive revisions from 43 analysts who rate the stock as a consensus Moderate Buy. Their revisions increased the consensus price target by more than 10% in 30 days, forecasting a nearly 10% upside and a one-year high for the market. However, the trend leads to the high-end range, which adds almost 20%. 

The price action in Snowflake stock is bullish in June. The market is rallying strongly, confirming the bottom of its trading range and likely heading to the high end soon. The consensus is a multi-year high for the market, the high-end breaks it out of the range, setting it up to advance another 60% and retest the all-time highs. 

Dollar General: Tactical Retreat Pays Off, Consumer Giant Back in Command

Dollar General’s (NYSE: DG) latest earnings reports confirm that its turnaround and nationwide rationalization were effective strategies. The results include industry-leading growth of more than 5%, better-than-expected revenue, substantial margins, and improved guidance.

Guidance is likely to be cautious, underpinned by plans to accelerate store remodels and store count growth. The critical factors for investors are that growth is expected to continue through the year’s end and into the subsequent fiscal year despite the impact of tariffs, the dividend is safe, and distribution increases may be resumed soon. 

MarketBeat tracks 26 revisions from 28 analysts. The trend is increasing coverage, compounded by firming sentiment and a rising consensus price target. The consensus target aligns with mid-June trading levels but is supportive of the market, which has risen 15% in the preceding 30 days, with revisions pointing to the high end. That adds 60% to the stock price and puts DG stock at a one-year high, on the verge of a complete market reversal. 

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The article "Q2’s Most Upgraded Stocks (And No, NVIDIA’s Not on the List)" first appeared on MarketBeat.