For years, the so-called FAANG stocks and the various different iterations have dominated tech investing and almost single-handedly have driven stock market gains. Social media, e-commerce, cloud computing and much more has become ubiquitous and undoubtedly will remain so for decades to come. Perhaps it may be time for investors to set their sights on some technology ideas that can rule the roost in the years to come.
We screened the BofA Securities US 1 list, which contains 36 stocks that are the firm’s top analysts’ best ideas now for institutional and high net worth retail investors, for the technology stocks that make the cut. We were intrigued that only two companies, one which is diversifying rapidly, are members of the FAANG club. The rest offer aggressive growth investors some unique opportunities and do not appear to be as overbought as many of the mega-cap favorites.
While these four stocks are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Amazon
This is the absolute leader in online shopping and remains a technology anchor on the US 1 list of top stock picks. 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. It has one of the most valuable brands in the world.
The company serves developers and enterprises through Amazon Web Services, which provides computing, storage, database, analytics, applications and deployment services that enable virtually various businesses. 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.
Like every year, online sales should continue to grow, especially during the busy Christmas shopping period, as Amazon remains the go-to portal for shoppers looking for holiday bargains and a way to stay out of brick-and-mortar stores this year if they choose to.
BofA Securities has a $3,560 price objective for the shares, while the Wall Street consensus target price is $3,724.98. The last Amazon.com stock trade on Wednesday came in at $3,184.94.
Lam Research
This remains one of the top chip equipment picks across Wall Street. Lam Research Corp. (NASDAQ: LRCX) is a leading global supplier of wafer fabrication equipment and services for semiconductor manufacturing, with core competencies in deposition, etch and clean equipment.
These systems play a critical role in enabling Lam Research customers to make chips smaller, faster and more performant. The company’s major customers include leading semi memory, foundry and integrated device manufacturers, such as Samsung, TSMC and Intel.
The company is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2020. Lam Research is expected to post quarterly earnings of $5.17 per share in its upcoming report, which represents a year-over-year gain of 62.6%. Revenues are expected to be $3.10 billion, up 43.1% from the year-ago quarter.
Holders of Lam Research stock receive a 1.43% dividend. BofA Securities recently raised its price objective to $365 and it looks to press higher soon. The posted consensus target price is $390.91, and the stock closed at $366.62 per share on Wednesday.
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