Technology

Baird Has 5 Top Technology Best Idea Buys for 2018

Fortinet

Many on Wall Street have stayed positive on this network security company. Fortinet Inc. (NASDAQ: FTNT) is a pioneer in the unified threat management segment of network security solutions. Its security appliances offer the ability to run multiple security functions simultaneously, without a significant drop in throughput, enabled by Fortinet’s unique custom-ASIC architecture.

The company reported solid third-quarter results, but guidance for fourth-quarter revenue and billings came in lower than expected. In fact, the company’s management sees risk related to macro weakness in North Asia/Caribbean, soft Service Provider spending and complex sales cycles. Baird analysts had this say:

Fortinet continues to win up-market deals as evidenced by large deal wins. Management is talking more about its Fabric, multi-product deals, non-FortiGate products, and enterprise bundles. We don’t expect them to compete in every large enterprise deal but they are increasingly mentioned by large resellers.

The $50 Baird price target compares with the consensus target of $44.36. Shares closed Tuesday at $44.32.

Micron Technology

This is a global leader in advanced semiconductor systems and is another top value pick from Baird for 2018. Micron Technology Inc.’s (NASDAQ: MU) 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. Its memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.

Micron and Intel announced last year the availability of their 3D NAND technology, the world’s highest-density flash memory. Flash is the storage technology used inside the lightest laptops, fastest data centers and nearly every cell phone, tablet and mobile device.

The company posted outstanding quarterly earnings recently and also provided forward guidance that exceeded Wall Street estimates. With memory demand drivers remaining somewhat underappreciated and with solid demand from end-markets such as data center, artificial intelligence (AI), deep learning, big data, mobile and autonomous driving, Micron continues to execute well on its manufacturing road map. The analysts expect the company to drive gross and operating margins higher in 2018, even if prices return to a more typical deflationary environment.

Baird has set its price target at $60. The consensus target is $58.89, and shares closed Tuesday at $42.97.

Salesforce.com

This top software-as-a-service company reported solid second-quarter fiscal 2018 results as billings drastically improved, and it is another Baird Best Ideas list growth idea for 2018. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.

It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices; and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions. Top executives are taking notice of the company’s increasing group of product offerings, and Baird said why:

Salesforce has evolved in recent years into a strategic vendor which pioneered enterprise adoption of the cloud — a trend evident in expanding traditional SI support, large deals. Strong enterprise adoption of its core SFA (Sales Force Automation), and Service applications, which are driving replacements of legacy Client/server applications, has catapulted the company to the No. 1 market share position in CRM, ahead of Oracle and SAP.

The Baird price target is $125. The consensus price objective is $121.58, and shares closed on Tuesday at $109.15.

These three growth and two value stocks are on the Baird Best ideas list that make good sense for investors looking for tech exposure in 2018. With the sector blazing last year, it gives investors a choice for which road to go down in terms of strategy.