Technology

Deutsche Bank Very Positive on Cloud and IT Spending: 5 Stocks to Buy Now

Akamai Technologies

This company got hit hard on earnings and is offering a very good entry point. Akamai Technologies Inc. (NASDAQ: AKAM) provides cloud services for delivering, optimizing and securing content and business applications over the internet in the United States and internationally.

The company offers performance and security solutions designed to help websites and business applications operate while offering protection against security threats. It also provides media content delivery solutions that are designed to deliver movies, television shows, live events, games, social media, software downloads and other content on the internet in fixed-line and mobile networks; adaptive delivery solutions for streaming video content; and download delivery solution that offers accelerated distribution for large file downloads, including games, progressive media files, documents and other file-based content.

The analysts like the setup for the shares and noted this:

The company is trading at a reasonable multiple and is likely to be an out of consensus beneficiary during the second half of 2019+ from total addressable market expansion and new growth opportunities in Edge Cloud Services for Internet of Things – i.e. Edge Computing and Security Services, IOT Analytics Processing, HD Video Surveillance Media Delivery, etc.

The $90 Deutsche Bank price target is well above the $79.86 consensus target. Shares closed Friday at $77.32.

Keysight Technologies

This more under-the-radar technology stock looks very interesting. Keysight Technologies Inc. (NASDAQ: KEYS) is a global electronic measurement technology and market leader helping to transform its customers’ measurement experience through innovations in wireless, modular and software solutions. Keysight’s electronic measurement instruments, systems, software and services are used in the design, development, manufacture, installation, deployment and operation of electronic equipment.

This is another solid valuation play, and the analysts noted this:

Of interest to clients is the “relevance” of the company’s Design, Test, and Instrumentation solutions: currently bench and modular hardware centric, and likely to transition to Software centric (Keysight PathWave Platforms, etc) – over the next several years, as 5G Broadband and IOT + Edge Cloud rollouts sequence through the product cycle – i.e. from Prototyping, Validation, and Production at the Wireless and Optical Layers to the Network Switch Router and Application + Security Layers.

Deutsche Bank has set its price target at $66. The consensus target is $61.14, and shares closed Friday at $59.97.

Commscope

This is another of the top ideas at Deutsche Bank. Commscope Holding Co. Inc. (NASDAQ: COMM) is a leading provider of antennas, cabling, connectors and other connectivity equipment for enterprise and service provider customers. The company is a market leader in its three segments: Wireless, Enterprise and Broadband.

The analysts see the stock as another good valuation idea and noted this:

We see Commscope also trading at a discount multiple (~10x P/E on our $2.95 fiscal year 2020 EPS view) as a multi year pure play beneficiary of the buildouts of 5G Small Cells and Metro Cells, along with a Fiber Connectivity attach rate, at major US and rest of world carriers, heading into 2019, and into 2020+.

The Deutsche Bank price target is $40. The consensus target is $34.31, and shares ended Friday at $29.75.

The technology revolution will only continue to grow as consumer and business demand for Internet of Things and beyond continues to manifest. While attractive now, these stocks are only suitable for accounts with a high risk tolerance, as earnings or guidance misses can cause big volatility.

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