JPMorgan Very Bullish on 3 Top Technology Stocks for Rest of 2016
Given the big day last Friday and a positive start to the holiday shortened trading week Tuesday, maybe, just maybe, the markets are ready to sweep away the malaise that has hovered over stocks since the beginning of the year. With many bearish voices howling that a crash could be right around the corner, stocks have plunged into correction status in 2016, and technology has been battered as much as any sector.
A set of new research reports from JPMorgan focus in on three technology stocks that the analyst feels are poised for a solid rest of 2016. Two have been absolutely hammered, and one was upgraded after coming off a period of restriction. All are rated Overweight at JPMorgan
This is the combined entity that was formerly known as Avago Technologies and Broadcom. Broadcom Ltd. (NASDAQ: AVGO) is a leading designer, developer and global supplier of a broad range of analog and digital semiconductor connectivity solutions. Its extensive product portfolio serves four primary end markets: wired infrastructure, wireless communications, enterprise storage and industrial and other.
Applications for the company’s products in these end markets include: data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays.
The company produces radio frequency (RF) front-end for LTE-enabled Apple products. Wall Street estimates that the company does 15% of its total business with the iPhone maker. Additional estimates are that Broadcom has between a 13% and 17% revenue exposure to Apple in the wireless communications segment, which was guided up 10% or more quarter over quarter for the third quarter. Customer diversity and content for Samsung could be more than enough to offset slower Apple business.
Top Wall Street analysts like the leadership in the mobile, data center and broadband markets, and especially in the RF arena. Many on Wall Street see a cyclical rebound in industrial and communications demand.
Broadcom investors are paid a 1.45% dividend. The JPMorgan price target for the stock is $170, and the Thomson/First Call consensus price target is $171.31. Shares closed most recently at $126.24 apiece.
This top technology stock was absolutely mauled last year, down over 60%, and now trades at a 3.38 price-to-cash-flow figure. Micron Technology Inc. (NASDAQ: MU) is a global leader in advanced semiconductor systems. Its broad portfolio of high-performance memory technologies-including DRAM, NAND and NOR flash, is the basis for solid state drives, modules, multichip packages and other system solutions. The company’s memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.