Technology

2 Giants Highlight Jefferies Technology Growth Stocks to Buy

Facebook

The huge social media leader has posted gigantic numbers that truly blew most of Wall Street away and traded to all-time highs. Facebook Inc. (NASDAQ: FB) has Instagram, which some analysts see revenues tripling in 2017 over 2016. Premium video and Graph Search capabilities help strengthen the social media giant’s earnings flow. Top analysts have noted in the past that Facebook and Instagram account for 5% of users’ total media time, but the company doesn’t come close to capturing 5% of total advertising budgets.

Most Wall Street analysts point to the fact that Facebook remains the top beneficiary of the adoption of mobile internet trends, with total U.S. internet time spent on Facebook and Messenger. Other metrics continue to explode, and the key is that no viable challengers are anywhere in sight. The social media juggernaut printed revenue and EBITDA that were 2% and 11% above consensus, and well above Wall Street expectations on Wednesday. The analysts admit they missed the call but are adding to positions here.

Analysts also remain bullish on Facebook Live, which was first rolled out only for iPhone users with verified accounts — a designation limited to journalists, celebrities and other public persons — but now anyone with an Android or iPhone can shoot live video from their phone, which can be viewed by Facebook users on any platform. To use it, you just go to the place where you would normally post a status update, but press the icon that shows a person inside a circle. This is yet another huge add-on for the social media market leader.

Jefferies raised its price objective to $160 from $145. The consensus target is $142.30, but that number is bound to go higher. The shares closed Wednesday at $118.06.

Infinera

Some feel this top company would be an outstanding addition to a networking giant as a takeover candidate. Infinera Corp. (NASDAQ: INFN) provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations. Infinera’s end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. Infinera’s unique large-scale photonic integrated circuits enable innovative optical networking solutions for the most demanding networks.

The analysts note that Alphabet’s recent announcement that it will be adding 12 new data center regions is a definite positive for Infinera. This is indeed a positive as the company posted lousy first-quarter results and the guidance for the second quarter was below expectations. The analysts do note that on the positive side, the Long Haul and Cloud Xpress units of the business seem to be performing very well.

The Jefferies price target was lowered to $18 from $22.50, and the consensus estimate is $18.50. Shares closed Wednesday at $12.14.


Four solid tech stocks ideas from Jefferies: two that have blown away numbers and two that are solid companies that have some work to do. One thing is for sure, they are all in the right areas of the sector, and as the economy improves their businesses should as well.