Despite the recent back-and-forth market rally, the Nasdaq and some of the top technology names have been struggling over the past few months. Inflation worries and rising interest rates have pressured some of the top stocks in the sector. Information technology (IT) plays a massive part in corporate productivity, and many of the top stocks look primed for a nice second half of 2021, and almost all are way off their 52-week highs.
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In a series of recent research reports, the IT team at BofA Securities makes the case that demand is picking up again and that, with the economy returning to life, there is some solid upside potential for some of the analysts’ favorite names. They are very positive on four industry leaders. While all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Fiserv
This solid fintech play has good upside to the BofA Securities price target. Fiserv Inc. (NASDAQ: FISV) provides financial services technology worldwide.
The company’s First Data segment provides merchant acquiring, e-commerce, mobile commerce and other business solutions; credit card and loan account processing, commercial payments, customer communications, plastics solutions, customer service and other products; and various network solutions and security and risk and fraud management solutions.
The Payments and Industry Products segment offers electronic bill payment and presentment services; internet and mobile banking software and services; account-to-account transfers; person-to-person payment services; debit and credit card processing and services; payments infrastructure services; and other electronic payments software and services.
BofA Securities has a $136 price objective on the shares, while the Wall Street consensus target is $122.32. The final Fiserv stock trade for Tuesday was reported at $115.71 share.
Splunk
This is a top Wall Street pick in its industry. Splunk Inc. (NASDAQ: SPLK) provides a software platform for collecting, storing, indexing, searching and analyzing machine-generated data, such as log files and configuration files, which are prevalent in every type of IT system, device and application.
Splunk technology is potentially applicable and disruptive in several market segments, including IT operations, security and compliance, and business intelligence. These market segments are collectively worth $28 billion today.
Wall Street analysts agree that the company offers the de facto standard for security information and event management. That is an area heavily focused on in the Biden executive order. Splunk also offers orchestration solutions for security operations, a fast emerging category of products.
The research report noted this:
Partners suggest healthy new activity, upsells in the first quarter with the cloud driving customer conversations and good initial observability feedback We expect first quarter cloud annual recurring revenue and total ARR upside to 85% year-over-year and 39%, versus our and the consensus of 82% and 37% . Reaffirm Buy/top pick our price objective with shares trading at 6.3x calendar 2022 revenue, believe risk/reward is attractive
The BofA Securities price target of $180 is lower than the $189.69 consensus target. Splunk stock closed on Tuesday at $118.71.
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