The company’s chief executive officer, Ginni Rommety, who had been in the position since 2012, recently stepped down, and the stock market greeted the news in a very positive manner. The solid quarterly report had the analysts saying this:
IBM reported revenue above the street on strength across all segments, particularly on Red Hat and strong mainframe cycle. We view cross IBM-Red Hat cross selling opportunity growing into 2020, return to total company growth, 4%+ dividend yield as strong positives.
IBM shareholders receive a large 4.13% dividend. The $170 Merrill Lynch price target compares with the $149.94 posted consensus target. IBM stock closed most recently at $156.76 per share.
This stock has been very volatile over the past year. Qualcomm Inc. (NASDAQ: QCOM) designs, develops and supplies semiconductors and collects royalties on wireless handheld devices and infrastructure based on its dominant position in CDMA and other related technology patents.
In addition, Qualcomm provides systems software and components to wireless handset vendors and promotes applications and services that run on high-speed wireless networks. The company operates primarily through two segments: CDMA Technologies and Technology Licensing.
5G should prove to be big for the company, and the analysts said this after the company reported earnings:
Qualcomm reported a strong first quarter, and second quarter revenue/EPS guidance of $5.30 billion/88c was strong on the surface vs the Street’s $5.09 billion/86c. Second quarter Mobile station modem guidance of 135 million disappointed vs our 156 million, offset by $31 average selling price guidance which was significantly higher than our $25. The results prove that Qualcomm is starting to benefit from the global 5G cycle.
Shareholders of Qualcomm receive a very dependable 2.74% dividend. Merrill Lynch has raised its price target to $115 from $110. The posted consensus target is $99.74, and Qualcomm stock was last trading at $90.61 a share.
This is a leader in the total addressable hard disk drive (HDD) market. Western Digital Corp. (NASDAQ: WDC) designs, manufactures and markets hard disk drives for use in enterprise storage, servers, desktop and laptop computers and consumer electronic devices. It also has a growing solid-state drive and storage systems portfolio and is currently the third-largest enterprise solid-state drive manufacturer.
The company sells its products directly to original equipment manufacturers, as well as distributors and retailers, and its production capabilities are vertically integrated. Western Digital posted solid results for the latest quarter, and the analysts noted this:
The company reported a strong quarter and guide with confidence in solidly expanding gross margins driven by flash pricing. Western Digital lost some share in capacity enterprise but we expect this to be a cyclical not structural issue. With earnings power headed toward $8+ in fiscal 2021, we see continued positive revisions and raise our price objective.
Western Digital shareholders are paid a 2.91% dividend. The recently raised Merrill Lynch price target is $90. The consensus analyst price target is $79.77, and the stock closed trading most recently at $68.70.
These five tech stocks have solid upside to the Merrill Lynch price targets and also offer investors perhaps a more comfortable entry point than some momentum plays. There is a good chance the market could start to trade sideways as investors take profits during the spring, and these could be good vehicles for a sideways or downward move.