While the technology trade has been outstanding for investors over the past five years, there is one thing that is the light in the tunnel that is dead ahead. Many of the top companies that have supplied those outstanding gains are getting a little long in the proverbial tooth, and while it’s smart to stay invested in the sector, it may make sense to look for new ideas with bigger upside.
A series of new Deutsche Bank research reports zero in on some top technology stock the firm has rated Buy that still have some big upside potential. While not suited for more conservative accounts, they look like good companies for aggressive growth portfolios.
This company has been on fire over the past year and remains a top pick at Deutsche Bank and across Wall Street. Broadcom Ltd. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.
Top Wall Street analysts like the leadership in the mobile, data center and broadband markets, and especially in the radio frequency (RF) arena. Many on Wall Street see a cyclical rebound in industrial and communications demand, and while the company was blocked in its attempt to buy Qualcomm, new chip designs are expected to drive future growth.
Broadcom has big exposure to the cloud through its Enterprise Storage segment (HDD controllers) and general data center build-outs in its Wired Infrastructure segment. Within HDDs, enterprise units are 15% to 20% of the business on a unit basis and 20% to 30% on a revenue/profit basis.
Also note that the company will report its fiscal second-quarter results on Thursday after the market closes.
Broadcom investors are paid a 2.91% dividend. The Deutsche Bank price target for the shares is $310, and that compares with the Wall Street consensus price target of $310.34. The stock closed trading on Tuesday at $259.26 per share.
This was a huge player in the fiber build-outs in the 1990s and may be ready to ramp back up for new deployments. Corning Inc. (NYSE: GLW) is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics and optical physics.