With the market making new highs seemingly every day, investors are in the unfamiliar spot of trying to gauge how much more room is left. With technology absolutely on fire, and prices getting stretched, new ideas are at a premium. Armed with new data from their Global Technology conference, the server and enterprise software analysts from Merrill Lynch came away feeling very good about five stocks they feel still have room to run. With much of Wall Street expecting capital expenditures to increase in the second half of the year, these five top stocks to buy make good sense for investors in a pricey market.
Salesforce.com Inc. (NYSE: CRM) has been the momentum stock traders dream over the past few years. The analysts at Merrill Lynch say that while the stock trades in line with its fast organic software-as-a-service (SaaS) peer group, they believe it should trade at a premium to the group owing to its dominant positioning in the powerful cloud, mobile and social computing waves, larger revenue run-rate compared to the group average, stronger cash generation and its TAM, which is substantially larger than the peer group average. The Merrill Lynch price target for the stock is $73, and the consensus target is $67.98. Salesforce closed Thursday at $51.37 a share.
8X8 Inc. (NASDAQ: EGHT) is a provider of secure and reliable cloud-based unified communications and virtual contact center solutions to more than 36,000 small, midsize and distributed enterprise organizations operating in more than 40 countries across six continents. This solid provider of unified communications and collaboration services has seen a mixed track record, as current year estimates have seen no revisions over the past few weeks, and the consensus for earnings has not been in a trend either. This may provide investors a good entry point on the name as it got hit hard last week on no apparent negative news. The Merrill Lynch price target for this Buy-rated stock is $12, and the consensus is at $11.72. 8X8 closed Thursday at $6.91.