Technology stocks have taken a beating since the beginning of the year, and the Nasdaq has firmly entered correction territory. The other major averages have been pulled lower as well, but the Nasdaq has gotten the worst of it, with its heavy weighting in tech stocks.
As it stands now, most tech companies are waiting out what could be a year of rising interest rates, at the behest of the Federal Reserve, and downside risk is a tough call at this point in the cycle. Analysts are making their pitches for the bulls and bears, but it is yet to be seen how this will play out. The question is if these stocks are in a deep value position or they could stand to sink lower, or even worse.
24/7 Wall St. is taking a closer look at a report from Citigroup and the seven software and cybersecurity companies it is targeting in the coming year. Although these particular companies do not make up a significant portion of the sector (like the big names of Alphabet, Apple or Microsoft), investors still could still see significant gains in playing these stocks.
The first stock on Citigroup’s list is Akamai Technologies Inc. (NASDAQ: AKAM). The investment house initiated coverage with a Buy rating, noting that Akamai is an early pioneer of powering a fast, safe and reliable public internet for all users. The company has extended beyond its content delivery roots to capture an outsized share of intellectual property traffic, while deepening its bench in the web-facing infrastructure protection arena.
The stock last closed at $112.56, and it has a 52-week range of $92.64 to $124.91. Akamai Technologies stock is down around 4% year to date.
Check Point Software
On Check Point Software Technologies Ltd. (NASDAQ: CHKP), Citigroup initiated coverage with a Sell rating, citing that topline growth trends have been hampered in the single-digit range. Also, it does not help that growth at competitors Palo Alto Networks and Fortinet is tracking far better than at Check Point.
The shares recently closed at $119.21, in a 52-week range of $107.85 to $137.49. Check Point Software Technologies stock is down 2% year to date.
Citigroup started coverage of Citrix Systems Inc. (NASDAQ: CTXS) with a Sell rating. The investment bank said that, amid a drawn-out and questionably-accretive license-to-SaaS model transition, executive transitions and increasing competition, the challenges for Citrix appear to be structural. Hence, the negative rating for the stock.
Citrix Systems stock closed most recently at $101.38, and it has a 52-week trading range of $78.07 to $145.19. The share price is actually up 7% year to date.
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