Technology

Analysts from Major Firms Issue Top Technology Stocks Picks for 2017

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As 2016 has ended and 2017 is afoot, it is important to consider what may be coming ahead rather than just relying on what happened in the prior year. A post-election rally has been so strong that most investors are expecting the market strength to remain in place. The bull market is now nearing eight years old, and the 24/7 Wall St. Dow Jones Industrial bullish and bearish outlook for 2017 has called for DJIA 21,422. This would represent a gain of more than 8.0%, after the Dow rose by 13.4% in 2016.

24/7 Wall St. reviews dozens of analyst upgrades, downgrades, initiations and reiterations each day of the week. This ends up being hundreds of research calls each week. After compiling many lists by sector, we have now grouped what are being deemed the top technology picks for 2017 from the top analysts on Wall Street. These have been taken from lists named the Top Picks, Franchise Picks, US 1 picks, Conviction Buy list and so on. They come from major firms such as Morgan Stanley, Merrill Lynch, Goldman Sachs, Jefferies and others.

24/7 Wall St. would like to remind investors that they should never just blindly follow analysts. After all, we would not have you thinking we blindly endorse or follow an analyst call just because someone else says they are great.

The traditional calls for Dow and S&P 500 stocks at this time imply upside of about 8% to 15% to each Buy and Outperform target. So what does it tell you if analysts are calling for 20%, 30% or even 50% in upside ahead? It implies that there is more risk. Analysts sometimes just get their thesis wrong, and sometimes there are outside forces that interrupt or destroy the potential upside.

Here are some of the top technology stock picks for 2017 that have been issued by some of the top analysts on Wall Street.

Deutsche Bank has named Alibaba Group Holdings Ltd. (NYSE: BABA) as the top China internet pick for 2017, calling for 21% in gross merchandise value growth this year. Morgan Stanley issued an above-consensus analyst target price of $130 for Alibaba in December, based on rich data from its ecosystem and with AliCloud becoming a growth driver. Jack Ma was just in New York City to visit Donald Trump before his inauguration, and the two men talked up a positive 2017. Alibaba has even started more measures to fight counterfeit goods.

Alibaba was last trading at $97.21, in a 52-week range of $59.25 to $109.87, and with a consensus analyst price target of $121.24.

The search giant formally known as Google was named in the Barron’s Top 10 Picks for 2017, and it also was named in the top 27 picks from Kiplinger for 2017, calling Alphabet Inc. (NASDAQ: GOOGL) an impressive growth company with revenues and earnings expected to rise by 17% in 2017. Jefferies still had Alphabet on its key Franchise Picks list after the first week of 2017, and its price target is $1,000. At the end of December, Aegis Capital initiated coverage with a Buy rating, and its price target was set at $980.

Shares of Alphabet were recently trading at $825.58, in a 52-week range of $672.66 to $839.00. The consensus price target of $968.55.

Though it may have found itself at odds with Trump during the election, Amazon.com Inc. (NASDAQ: AMZN) has tentacles in many areas. Merrill Lynch made a call late in December looking for close to 50% upside — more upside than just about any other tech stock covered there. While Merrill Lynch sees substantial upside, this call was still shy of the street-high price target for Amazon shares of $1,250.

Amazon was named a top internet pick for 2017 by Jefferies in January, with its disruption and e-commerce driving growth ahead. Canaccord Genuity released its top global picks for 2017 in January and Amazon was among them, but with a more timid $875 target, based on sustainable growth. Evercore ISI also had Amazon as its top internet pick for 2017 as well. Kiplinger called it one of 27 top stock picks for 2017, citing that Value Line sees revenues rising 19.5% annually over the next five years.

Amazon traded at $794.73, with a 52-week range of $474.00 to $847.21 and a consensus price target of $928.53.

Apple Inc. (NASDAQ: AAPL) is the largest company in the world by market cap, and it is considered in the top global brands. Apple was named a top pick for 2017 by Morgan Stanley in the first days of 2017, noting a coming iPhone 8 super cycle driving shares much higher. Barron’s recently listed Apple in its Top 10 Picks for 2017 as well. What matters here from the 24/7 Wall St. 2017 bull/bear outlook is that Apple analysts were far too optimistic in 2016, and it stands to reason that after a disappointing 2016 those analysts are far less enthusiastic for 2017.

Apple was last trading at $118.97. The 52-week range is $89.47 to $119.43, and the consensus price target is $132.25.

Among the top large cap performers of 2016, shares of NVIDIA Corp. (NASDAQ: NVDA) were up over 200% from early in 2016 at the start of 2017. One issue that stood out was a short seller report from Citron Research right at the start of 2016. While it was quite negative about its valuation and real growth prospects, other analysts are naming NVIDIA among their top picks for 2017 with higher targets.

On December 20, Goldman Sachs added NVIDIA to its Conviction Buy list with a $129 target, based on its unique growth story from gaming, virtual reality, automotive, and data center. After the start of 2017, Jefferies raised its NVIDIA target early in 2017 to $125 from $110 as part of its Franchise List Portfolio.

Shares of NVIDIA were last seen at $106.21, in a 52-week range of $24.75 to $119.93. The consensus price target is $96.39.

Box Inc. (NYSE: BOX) is up close to 50% from the start of 2016. Oppenheimer gave it an $18 price target in early January. The firm reaffirmed its Outperform rating and named Box among the Oppenheimer Top Picks series. This is just a $2 billion outfit, but Oppenheimer was positive on Box’s transformation to a broad enterprise content platform that can win from its IBM partnership.

Trading at $15.40, Box also has a 52-week range of $8.82 to $16.59 and a consensus analyst target of $18.20.

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