Technology

Despite Horrible Sentiment, Top Networking Stocks Could Have Big 2016

Infinera

Another solid play for investors in data networking, Infinera Corp, (NASDAQ: INFN) provides Intelligent Transport Networks for network operators, enabling reliable, easy to operate, high-capacity optical networks. It leverages its unique large-scale photonic integrated circuits to deliver innovative optical networking solutions for the most demanding network environments. Intelligent Transport Networks enable carriers, cloud network operators, governments and enterprises to automate, converge and scale their data center, metro, long-haul and subsea optical networks.

The company blew away earnings in the most recent quarter, and it is expected to report this quarter on Thursday. Many analysts feel that the hot Facebook numbers and quarter, along with increased capital expenditure guidance, could prove to be a positive for Infinera.

The fact the company is leveraged to data center interconnect market makes it a top small cap stock to consider. The huge spending for data center optical, which many think will be $4 billion to $5 billion, and $5 billion to $6 billion for the metro spending is a real key to the story for the company.

Deutsche Bank has a whopping $28 price target, and the consensus target is $25.18. The stock closed Tuesday at $13.36.

Juniper Networks

This solid technology stock has been a long roller-coaster ride for investors over the last two years. Juniper Networks Inc. (NYSE: JNPR) is a provider of high-performance network infrastructure to service providers and enterprises. Key products include IP-based routers for service provider core and edge networks, security solutions and high-end enterprise routing equipment. Juniper’s products supports converged data, voice, video and wireless applications across extended network.

The stock has taken a big hit since printing highs in November and is back to a very solid support level for investors looking to buy shares. For the fourth quarter, the company posted solid numbers, but the forward guidance left much to be desired, and the stock was hit hard yet again. Much of the lowered guidance was attributed to currency effects, and Deutsche Bank sees the company as another that will benefit from the big data center refresh this year.

Juniper investors receive a 1.82% dividend. The Deutsche Bank price objective is $31. The consensus target is $28.93, and the stock closed Tuesday at $21.99.


Clearly, the markets are on edge, and things could get worse before they get better. However streaming, storage and mobile demand continues to grow almost unabated, and all these companies should benefit as massive build-outs stay on the books for 2016 and beyond.