Get ready to ring in the New Year with these upgrades

Santa Claus rally or not, the analysts are upping their targets on some high-quality tech names that stand to rally strongly in 2024. 

Salesforce.com Inc. NYSE: CRM, Zscaler Inc. NASDAQ: ZS and Workday Inc. NASDAQ: WDAY are all supported by secular trends that should sustain their growth, aided by AI. 

AI is the hottest thing in tech right now, and these companies use it to aid their operations and offer its utility to their clients. In this paradigm, these cloud companies can be expected to continue to grow and penetrate with services as they lead their respective industries next year. 

Salesforce.com is the most upgraded stock on MarketBeat 

Salesforce.com has been ranked on MarketBeat’s most upgraded list for several quarters with no change other than its placement. The company is a top-10 most upgraded stock, as are all on this list, with 19 positive updates during calendar Q4. This stock is rated a "moderate buy" with a price target that is up 30% over the last year. 

The only negative is that the consensus target assumes the stock is fairly valued near current levels but the trend in sentiment offets it. Only one price target issued in Q4 is below the consensus; most are in the $275 to $325 range, implying the all-time high stock price will be retested and potentially exceeded in 2024. 

The latest upgrade comes from Morgan Stanley. Analysts at the firm raised their rating to "overweight" and set a $350 price target. That is the new high target for this stock, about 33% above the current action. They cite product innovation and AI as drivers of the business. 

They also see the market pricing with a low expectation for growth despite the company's penetration gains and price increases. AI should aid sales and revenue with a significant boost as the data cloud comes online later in the year. 

Workday executes well, shares surge to new highs

Workday is another "most upgraded" stock on the Marketbeat.com platform, with 15 positive revisions in the last quarter. Most came out following the Q3 release due to outperformance and an unexpected guide— takeaways from the analysts' chatter center on execution. 

The company is cross-selling products to existing customers while gaining traction with new and existing businesses. That is evidenced by new deals, early renewals and longer contracts, which help clear the long-term revenue outlook. The company is viewed as the leading vendor of back-office software and among the largest, fastest-growing software companies on the market. Growth is running in the mid-teens and persist at this level next fiscal year. 

Analysts rate this stock a consensus "moderate buy" and fairly valued trading near current levels. Because the consensus estimate is trending higher and most fresh targets are above it, the stock could move to the high end of the target range soon, aligning with record-high share prices. The next catalyst is in late February, when the company reports Q4 results. Outperformance is expected because it tends to beat consensus, and considerable business momentum is present. 

The market for WDAY is hopeful. The stock surged following the Q3 results, creating a bullish flag pattern. The pattern suggests price action will continue to move upward with a target at or near the all-time high. 

Zscaler scaling the wall of worry

Zsaler shares corrected hard on fear of slowing growth but are now recovering from the fall. The market is up nearly 200% since the bottom and heading higher by the look of things. The market trends suggest persistent demand compounded by increased spending as cyber-attacks increase and the cloud grows. Zscaler is the fifth most upgraded stock for the quarter and has been on the list most of the year. 

Analysts rate Zscaler a consensus "moderate buy" and have dramatically shifted its price targets. The consensus target is lagging the market but up sharply from lows set earlier this year and probably heading higher in 2024. Deal momentum is strong at the end of the calendar year and is supported by hyper-growth in AI and the cloud.