Technology

RBC Has 6 Top Tech Stocks to Buy for the Rest of 2017

CDW

This is a way for more conservative accounts to play the technology sector. CDW Corp. (NASDAQ: CDW) provides IT products and services to business, government, education and health care customers in the United States and Canada. It offers discrete hardware and software products to integrated IT solutions, such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.

RBC has highlighted this company in the past as having virtually no exposure to China, and it is a very attractive and somewhat defensive small/midcap play for investors. The firm also thinks that the company has benefited from the integration of U.K. IT services and solutions provider Kelway, although CDW has implied numbers for the quarter from Kelway will be down.

The analysts have cited in the past the unique culture and the compensation structure, and the Dell Partnership as among the top reasons to own the stock. They also pointed out the company has negotiated weak PC sales periods in the past, and the current uptick is a positive going forward. And they think the tailwind from shares repurchases may not be factored in.

CDW investors receive a 1.00% dividend. The stock has a $70 target at RBC. The consensus target is $66.60, and shares closed Friday at $63.30.

NVIDIA

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 first-quarter results that well exceeded Wall Street estimates, with much of the gains directly from the firm’s huge data center and AI businesses. The company reports again this week, and many feel it can beat consensus estimates for the quarter.

Investors receive a 0.33% dividend. RBC has set its price target at $175, and the consensus target is $141.56. Shares closed Friday at $167.21.

Western Digital

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 company reported solid results, but some analysts were concerned with the lower guidance and felt that margins may have peaked. The guidance, while conservative, leaves the company plenty of room to hit calendar 2017 expectations and perhaps exceed them. With 3D NAND transition continuing and 64 layer shipping, the stock has plenty of room to run.

Shareholders receive a 2.46% dividend. The $115 RBC price target is in line with the consensus target of $115.22. Shares ended last week at $81.17.

Six top companies to buy for the rest of 2017 and beyond. Given the large move in the shares, investors may want to buy partial positions now and see if we don’t get a back-up in the next 60 to 90 days.

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