Baird Says Stay With the Big 3 Tech Giants for 2019 and Beyond

Recently there has been a plethora of negative sentiment directed at some of the biggest technology companies, and some of it with good reason. We are in uncharted waters when it comes to many of the areas that mega-cap tech is pursuing, and investors can expect the level of scrutiny to remain elevated. However, as long as the top companies continue to make our lives better via technology, they will remain at the forefront for investors.

In a new research report, Baird analysts highlighted some of the top companies from the conference, and three stocks are rated Outperform at the firm.

The report said this:

Day 2 of the conference was highlighted by a focus on Artificial Intelligence/Machine Learning technologies and evolving use cases for voice-enabled commerce. Google continues to invest heavily in transaction-oriented services, leveraging user data across seven billion-user properties to help retailers create online shopping experiences for users with limited friction. Conversations with digital marketing contacts also suggest demand remains strong for Facebook advertising despite mixed headlines and shift to Stories.


The search giant continues to expand and, while search is king, the cloud presence is growing fast. Alphabet Inc. (NASDAQ: GOOGL) is a global technology company focused on key areas, such as search, advertising, operating systems and platforms, enterprise and hardware products. It generates revenue primarily by delivering online advertising and by selling apps and contents on Google Play, as well as hardware products. The company provides its products and services in more than 100 languages and in 190 countries, regions and territories.

Alphabet offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.

The company blew out the latest earnings numbers, and with a wide and bountiful silo of products and services, the stock remains almost unchallenged. It should be noted that traffic acquisition cost relief drove 20% gross profit growth, despite heavy cloud infrastructure and YouTube content investment. The Baird team noted this in their report:

At the conference, Google outlined expanding capabilities to facilitate commerce, capitalizing on the “treasure trove” of data provided by seven different properties each with at least one billion active users (Android, Search, Chrome, Maps, Play, YouTube, and Gmail). Smart shopping campaigns leverage machine learning to make sense of touchpoints along the consumer purchase path, including better offline attribution capabilities (locally-oriented searches +200% over last two years) and improved purchase conversion rates (20% on average).

Baird has set its price target at $1,380, while the Wall Street consensus target is $1,383.91. The shares closed most recently at $1,159.83 apiece.