When you have the kind of paralyzing month that the markets presented to investors in February, everybody starts to doubt the strength that has been present for years, and with good reason. Rates are going higher, but they remain historically low. The potential for trade wars seems omnipresent, although the president said Monday that he may not impose tariffs if a fair NAFTA deal was renegotiated.
The reality is the economy may be on the best footing in 20 years, and while market gains like we saw 2017 may not remain the norm, there is every reason to remain optimistic, especially as the Nasdaq continues to show leadership in the market, and top U.S. tech companies dominate that index.
A new Jefferies research report highlights the firm’s top technology picks. Here we focus on five that continue to show dominance in their arenas of technology. All make sense for growth accounts with higher risk tolerance levels.
This remains a top pick on Wall Street and Jefferies remains very positive on it. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide. It develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers.
The company reported outstanding results that beat expectations, and the Jefferies report said:
Activision reported results, beating forecasts and guiding 2018 conservatively. Since 2011, the company has ended the year 19% higher than the initial outlook, on average, which suggests $3.00 in earnings per share could be achievable. We note that the beat this quarter was driven by a resurgence on Call of Duty as well as in game spend. We raised estimates and note that our new $3.02 estimate for 2019 is ahead of consensus.
Shareholders receive just a 0.51% dividend. The Jefferies price target for the stock is $86, and the Wall Street consensus target is $74.04. Shares closed Monday at $75.10.
This absolute leader in online retail and dominant player in cloud storage business remains the top internet pick at many firms on Wall Street. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.
Amazon Web Services (AWS) is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market. The company serves developers and enterprises through AWS that provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses.
Amazon absolutely blew out earnings, and Jefferies said this:
The company reported robust fourth quarter revenue results. Operating Income was record-high driven by solid ad revenue and robust retail volume. As usual, guidance was conservative on margins for the first quarter. We find our long-term thesis intact and reiterate our view that Amazon will take online penetration from 10% currently to 25-30% long-term, the AWS opportunity will be a revenue growth engine with margin accretion for the entire business while international opportunities provide even further upside.
Jefferies has a massive $1,750 price target, and the consensus target is $1,583.84. Shares closed at $1,523.61 on Monday.