This top chip stock has reported very strong earnings, and it was the top performing stock in the S&P 500 last year. NVIDIA Corp. (NASDAQ: NVDA) is one of the leaders when it comes to supplying graphics processing technology for the 3D graphics market, including desktop graphics processors and gaming consoles.
NVIDIA is also moving into visual computing chips for cars, mobile devices and supercomputers. The company has been able to use its ability to leverage past investments, with a more controlled spending structure ahead on unified, which enables strong cash flow that is allowing a focus on capital return, which is currently estimated to be $1 billion next year.
Top Wall Street analysts feel the stock is maturing to a platform company from a pure chip company, and Jefferies sees the stock continuing to benefit from four secular trends: virtual reality, PC gaming, chips in the automobile industry and graphic processing units (GPUs) in the cloud.
The company posted gigantic third-quarter results that well exceeded Wall Street estimates, with much of the gains directly from the firm’s huge data center and AI business.
Investors receive a 0.33% dividend. The $240 RBC price target accompanies an Outperform rating. The consensus target is just $202.30, but shares closed Monday at $212.63.
This probably is one of the most disliked tech stocks now, and it is down over 30% since April. Seagate Technology PLC (NASDAQ: STX) designs, manufactures and sells electronic data storage products in the Asia-Pacific, the Americas and EMEA (Europe, Middle East and Africa) countries.
The company provides hard disk drives, solid state hybrid drives, solid state drives, PCIe cards and serial advanced technology architecture controllers that are designed for enterprise servers and storage systems in mission critical and nearline applications, as well as for client compute applications comprising desktop and mobile computing.
One of Wall Street’s biggest activist investors, ValueAct Capital, became one of Seagate’s largest shareholders last year with a 9.5 million share stake. The firm reported in August that it owned a 7.2% stake in the company at 13.82 million shares.
Seagate shocked Wall Street when it posted results that blew away estimates and sent the share rocketing higher. The posted earnings per share for its fiscal first quarter of 2018 were less than in the same period last year, but it came in well above the Wall Street earnings estimate for the quarter. The company also reported revenue that was lower than in its fiscal first quarter of 2017, but again much better than the analysts expected.
Investors receive a 6.63% dividend, but that could be cut. RBC rates the shares Sector Perform, and their $40 price target compares with a consensus target of $37.48. Shares ended Monday at $37.66.
This long-time innovator in the storage industry is a leader in the total addressable HDD market. Western Digital Corp. (NASDAQ: WDC) is an industry-leading developer and manufacturer of storage solutions that help to create, manage, experience and preserve digital content.
The company is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed. Its products are marketed under the HGST and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure providers and consumers.
The stock traded down after earnings due to concern on peak margins, despite earnings guidance for the fourth quarter and fiscal 2018 that was better than Wall Street expectations. NAND supply-demand will not come into balance until mid-calendar 2018. So RBC and most on Wall Street feel the shares have room to run.
Shareholders receive a 2.28% dividend. RBC’s Outperform rating comes with a $115 price target. The consensus target is $113.81, and shares closed on Monday at $88.44.
These five companies are reaping the benefits of the huge growth in the cloud. With more and more data centers coming online to handle the tremendous volume from consumers and business, you can bet that the torrid growth and spending will stay in place for years to come.