10 Large-Cap Tech Stocks Expected to Outperform Apple and Amazon in 2018

Lam Research: Pullback May Be a Gift

Lam Research Corp. (NASDAQ: LRCX) had more than doubled this year alone, but a recent post-earnings pullback has given investors room to look at getting back in the stock. The maker of chip processing equipment used in making integrated circuits has seen its shares retreat by about 15%. At $185 a share most recently, Lam Research has a consensus target price of $229 that still implies upside of over 23%. The stock had a consensus target price of $193 back in mid-October. Merrill Lynch recently kept a much higher $270 price objective.

Lam Research has a 52-week range of $103.01 to $219.70. The market cap is $30.0 billion. Shares were up 76.4% year to date.

Micron: Dirt Cheap Valuations in DRAM and NAND

Micron Technology Inc. (NASDAQ: MU) is the leader in DRAM and has been rapidly expanding in NAND. Its shares more than doubled over 2017, but they also have pulled back about 15% from recent highs. With a consensus price target of $53.86, the implied upside is more than 24% from the recent share price of $43.25. The consensus target price also has risen, up from $48.95 in mid-October and from $43.50 in mid-September.

Susquehanna recently set a $60 price target, which would imply upside of nearly 40% for Micron if the firm is right in being so aggressive. Micron’s growth is expected to continue in 2018, but a mixed outlook for 2019 keeps valuations low at way under 10 times expected earnings. Still, the risk here is that investors never want to give Micron a high valuation multiple on earnings, and some analysts have warned that chip growth is seeing supply catch back up to demand.

Micron has traded between $19.49 and $49.89 a share in the past year, and it has a market cap of $49.4 billion. The stock was up 97.1% so far in 2017.

Salesforce: Riding the Marc Benioff Tide to Infinity Inc. (NYSE: CRM) has grown in its CRM software and app solutions for businesses. It is also getting deeper into cloud and data operations and collaboration efforts. And now investors “only” have to pay about 75 times expected earnings, rather than its forward price-to-earnings ratio of 100 that they used to have to pay. Revenue growth is expected to remain above 20%, and operating earnings are expected to remain close to 30% here. Despite more than a 5% pullback after earnings, the reality is that Salesforce shares have held up much better than some tech peers during the November and December tech-exit rotational trading.

With a share price of $103.50 and a consensus analyst target price of $121.76, analysts are calling for upside in Salesforce of almost 18%. UBS is even more aggressive with a $135 price target, and Morgan Stanley sees upside to $127 here.

Salesforce has a market cap of $75.3 billion and a 52-week range of $68.23 to $109.19. Its shares were up 51.1% so far in 2017.

Skyworks: Many Solid Growth Target Markets Ahead

Skyworks Solutions Inc. (NASDAQ: SWKS) has seen a sharp pullback of almost 20% from its recent highs. Still, the maker of complex chips for electronics, aerospace, communications, the Internet of Things and many more applications has a total market opportunity that is expected to keep growing, and analysts see growth continuing in markets in 2018.

The consensus price target of $118.62 in December was the same as the prior month, but that was up from almost $114 in October. Earnings and sales growth expectations for about 10% growth seem to be the target now, and 13 times expected earnings does not exactly sound expensive on the surface. KeyBanc’s target of $125 would leave an implied upside of 30%, if that is proven correct.

The 52-week range is $73.94 to $117.65. The market cap is $17.7 billion. Shares were up 29.0% so far in 2017.

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