The ongoing bullish trend in Wall Street has not shown any signs of slowing down even after three years. While the majority of the surge has been fueled by an extraordinary integration of generative artificial intelligence (AI) technology globally, cyclical industries like industrials, financials, consumer discretionary, and utilities have also joined in.
The bull market is anticipated to remain strong in the coming period, fueled by a strong U.S. economy, a falling inflation level, strong financial performance, and the Federal Reserve's return to a low-interest rate approach along with supportive monetary strategies.
Although the market rally has occurred, a number of technology stocks have dropped from their 52-week peaks and are now offering appealing price levels. We suggest three such stocks that have a positive Zacks Rank. These include:DocuSign Inc. DOCU, Reddit Inc. RDDT and Fair Isaac Corp. FICO. Each of our selections currently has a Zacks Rank of #1 (Strong Buy). You can viewthe full list of today's Zacks #1 Rank stocks here.
DocuSign Inc.
The core of DocuSign's power is its subscription income, which has made up the bulk of its revenue in the last three years. DOCU keeps effectively turning its sales costs into global expansion.
The same applies to its research and development focus, which has led to product improvements, enhanced user experience, and contributed to maintaining an expanding customer base. DOCU's solid connections with technology leaders like Salesforce and Microsoft also reinforce this ecosystem. DOCU has strengthened its ties with major technology companies such as Salesforce and Microsoft.
DocuSign is projected to see a 7.1% increase in revenue and a 3.9% rise in earnings for the current year, which concludes in January 2026. The Zacks Consensus Estimate for this year's earnings has risen by 0.5% over the past 30 days.
DOCU is currently being traded at a 37% reduction compared to its 52-week peak. The short-term average price prediction from investment firms suggests a rise of 37.3% from the most recent closing price of $67.91. The projected price range from these firms is between $70 and $124. This implies a potential gain of up to 82.6% with no expected decline.
Reddit Inc.
Reddit is a social media and community-driven platform that facilitates real-time exploration, discussion, and interaction across numerous interest-focused communities. RDDT is experiencing significant growth in user participation, such as increased daily and weekly active users, higher revenue per user, and enhanced advertising solutions like DPA, Reddit Pixel, and CAPI.
RDDT's artificial intelligence-driven capabilities, such as Reddit Answers, play a significant role in improving content exploration and customization. Reddit Answers attracts over six million users each week. RDDT seeks to enhance the process of bringing advertisers on board and boost campaign results by integrating with Smartly.io and Meta Platforms' campaign import feature. The incorporation of AI is contributing to the growth of the global user audience, which is impressive.
Reddit is projected to see a revenue growth rate of 58.6% and earnings growth of over 100% this year. The Zacks Consensus Estimate for this year's earnings has increased by 0.5% in the past 30 days.
RDDT is now being traded at a 40.9% reduction compared to its 52-week peak. The short-term average price forecast from investment firms suggests a rise of 11.8% over the most recent closing value of $200.76. The projected price range set by the brokerages is between $110 and $300, which implies a potential gain of 49.4% and a possible decline of 45.2%.
Fair Isaac Corp.
Fair Isaac is reaping the rewards of solid financial results fueled by significant growth in its Scores and Software divisions. FICO has broadened its scoring models to include 'Buy Now, Pay Later' loan information, improving the reliability of FICO scores.
Improvements in credit scoring, such as the creation of FICO Score 10T for non-GSE mortgages, offer substantial potential for expansion. The Software division has shown resilience, with higher usage of SaaS and license income reflecting robust platform interaction. FICO's Lenders Leading Inclusion Program helps financial institutions make more informed choices.
Fair Isaac is projected to see a revenue growth of 19.6% and an earnings increase of 30.7% this year, which concludes in September 2026. The Zacks Consensus Estimate for this year's earnings has risen by 0.1% over the past 30 days.
FICO is now being traded at a 31.9% reduction compared to its 52-week peak. The short-term projected price from brokerage analysts suggests a rise of 21.1% over the most recent closing value of $1,636.65. The estimated price range set by the brokerages lies between $1,047 and $2,400. This implies a potential gain of 46.6% and a possible decline of 36%.
This piece was first released on Zacks Investment Research (Healthy urvival).