Truist says a strong economy will ultimately drive stocks higher — here are 3 names to consider

Markets are off to a roller-coaster ride into 2025, with new data on jobs and inflation pushing investors in different directions.

Employment data showed 256,000 new jobs were created in December, the best number since March last year. Inflation, meanwhile, appears to be cooling, with core CPI rising just 0.2% from November, falling to an annual rate of 3.2% after stabilizing at 3.3% since September 2024.

Overall, the employment and inflation data point to conflicting forecasts for Fed interest rate policy.

So, looking ahead, what does this mean for investors? Keith Lerner, chief market strategist at Truist, summed up the bullish case, saying: "We prefer a stronger economy and fewer rate cuts than a weaker economy that requires more aggressive rate cuts... A resilient The economy should continue to support higher corporate growth rates, with the economy proving less sensitive to interest rates than historically in recent years. "

With all of this in mind, stock analysts at Truist recommend investors keep an eye on three stocks that will rise as stronger economic conditions push stocks higher. Looking at the TipRanks database, we see that all three are rated Buy on Wall Street. Below is a detailed introduction to them.

We're launching Down Under with Australian-American software company Atlassian. The software company has built its business and reputation on a range of collaboration tools designed for marketing, project and product management. These tools are perfect for the digital workplace, especially given the rise of remote working, and Atlassian's products, including its famous Jira software package, have proven popular. Other products include Confluence, designed to centralize company data in one place; Guard, for cloud security; and Compass, for maintaining software health. Taken together, Atlassian's suite of products enables employees to operate as a team, assign and track tasks, organize information, and maintain a secure digital environment.

Atlassian is a global company with employees in 13 countries and more than 300,000 enterprise customers in 200 countries around the world. The client base includes well-known brands such as The New York Times, Dropbox, Audi and the NBA. Atlassian even partners with NASA and likes to brag that its software is used on two planets - the Jet Propulsion Laboratory, which controls the Mars Curiosity rover, uses Atlassian software products.

The company's fiscal 2025 began last summer, and its first-quarter 2025 report in October showed solid growth. Atlassian achieved revenue of US$1.19 billion, exceeding expectations by US$30 million and growing 21% year-on-year. In terms of net profit, the company achieved non-GAAP earnings per share of 77 cents, an increase of 12 cents per share from the previous year and exceeding expectations by 12 cents. Cloud revenue was the main driver of growth, up 31% year over year.

Going forward, Atlassian expects continued growth. The company expects second-quarter fiscal 2025 revenue to be in the range of $1.23 billion to $1.24 billion, slightly above the consensus of $1.23 billion, and expects cloud revenue to grow 25.5% year over year.

In a report on Atlassian for Truist, five-star analyst Joel Fishbein said he believes the company's prospects are better than published guidance. He wrote of the software company: "While we may have missed the first phase of the rally following their most recent earnings report, we believe there is still room for upside from here... We believe Atlassian Companies in our infrastructure coverage that have the most favorable near-term model settings, given the valuation gains we saw at the end of the year, we prefer those that we believe can continue the upward tempo into the fourth-quarter earnings season without a reset. The company's stock. Specifically, we think the company's revenue outlook is more conservative this year because they are not benefiting from the server obsolescence events they are comparing to."

Fishbein subsequently gave TEAM a buy rating and a $300 price target, which suggested the stock would rise 18% over the next year. (To view Fishbein's record, click here)

Atlassian's "Moderate Buy" consensus rating is based on 22 recent Wall Street reviews, including 16 "Buy" and 6 "Hold." The stock is priced at $254.25, with an average price target of $283.80 and a one-year upside potential of 11.5%. (look TEAM Stock Forecast)

Dynatrace Corporation (DT)

The second stock we'll look at is Dynatrace, a software intelligence and observability company with a platform designed specifically for enterprise cloud use. The company's platform is focused on supporting flawless and secure digital operations, enabling customers to simplify complex cloud environments through AI-driven data management, intelligent automation and practical data analytics. Customers can do more with less by unifying their network management and cloud monitoring for faster, more efficient operations.

Dynatrace's platform products are used across all areas of today's technology and business landscape. It leverages artificial intelligence to improve automation, digital security and infrastructure monitoring, which are important aspects of any business cloud. The model has proven popular, and the company, founded in 2005, now has more than 4,000 customers and more than $1.6 billion in annual recurring revenue (ARR).

That last one is a key metric, an important predictor of future performance, and one that Dynatrace is working to improve as ARR growth slows in 2024. The company's year-over-year ARR growth was 20% as of March 31 last year; it was reported to be 19% in the second quarter of fiscal 2025 (the quarter ending September 30, 2024).

While ARR growth slowed slightly, Dynatrace's revenue and earnings continued to trend upward. The company's revenue in the second quarter of fiscal 2025 reached $418 million, a year-on-year increase of 19% and $11.7 million higher than expected. On a non-GAAP basis, earnings per share were 37 cents, 5 cents above expectations and up 6 cents year over year.

This is another stock covered by Truist's Fishbein. The analyst, who is ranked among Wall Street's top 2% stocks by TipRanks, pointed to the company's slowing ARR growth and the moves to address the issue. Fishbein said of Dynatrace: "We believe 2025 is a key year for the Dynatrace story. After a year of slowing net new ARR growth, the company has made a number of moves on the product and business market fronts that should be in place this year. There will be an impact. From a product perspective, the company has been looking to leverage its platform architecture to scale out into new verticals such as security, and at the end of the last fiscal year, they achieved an ARR of 1 for their application security product. The US$100 million target was delayed by 12 months.”

Looking ahead, the analyst is confident Dynatrace will be able to execute on its plans, adding: "We believe the go-to-market changes the company is making now are more important than technology needs. We think two of the factors that will impact the model by 2025 The key changes are the maturation of DPS products and a greater focus on strategic customers.”

Fishbein has a Buy rating on DT with a $70 price target, indicating his confidence in 37% one-year upside potential.

Overall, Dynatrace has 25 recent analyst reviews on record, favoring a "Moderate Buy" consensus by a ratio of 18 to 7 in favor of a "Buy" over a "Hold." The stock is currently trading at $51.06, with an average price target of $62.44, implying a 12-month upside of 22%. (look DT Stock Forecast)

Sofa base (according to)

We'll wrap up Truist's selection with Couchbase, another database platform provider that offers services that support cloud, edge computing, and artificial intelligence applications. Couchbase's database product is based on the popular as-a-service model, known as DBaaS (database as a service). The company's flagship product, Capella, provides a faster platform for database transactions, search and analytics, as well as artificial intelligence and edge computing applications.

Couchbase's high-end database services are widely used in sectors such as retail, travel and gaming, as well as in important sectors such as healthcare or utilities. The company's enterprise customer base includes well-known brands such as GE, Tommy Hilfiger and United Airlines.

Last month, Couchbase launched a major addition to Capella's capabilities with the launch of the Capella AI service, designed to address specific data challenges during the AI ​​boom. Like the company's larger product line, the new products are cloud-based, scalable and secure.

Also in December, Couchbase released its third-quarter financial results for 2025, covering the quarter ended October 31. The company's total quarterly revenue was US$51.6 million, a year-on-year increase of 13%, exceeding expectations by US$830,000. Couchbase posted a net profit loss, but its fiscal third-quarter non-GAAP loss was 5 cents per share, 3 cents better than expected.

Analyst Miller Jump covers Truist's Couchbase and believes the company is well-positioned to generate gains in the future. As Jump puts it, "We believe Couchbase stock will have a favorable risk-reward profile starting in 2025. The company's enterprise customer concentration has led to some volatility in the revenue model this year, but we believe they are poised to grow steadily in 2025 due to their Capella's DBaaS offering is a growing part of the business mix and we also believe they are well positioned to grow revenue over the coming year as the number of customers increases."

These comments support Jump's Buy rating on BASE, and his $21 price target implies a one-year upside potential of 28%. (To view Jump's track record, click here)

There are 14 recent analyst reviews recorded for Couchbase, with 12 Buys, 1 Hold, and 1 Sell each giving the stock a Strong Buy consensus rating. Shares are trading at $16, and the average price target is $23.50, implying a 12-month upside of 43.5%. (look Basic inventory forecast)

To find great ideas for stocks trading at attractive valuations, visit TipRanks The best stock buying tool that combines all of TipRanks' stock insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. This content is for reference only. It is important to do your own analysis before making any investment.