Despite a beat down to end last week, the Nasdaq is still up a stunning 32% so far in 2023, while the S&P 500 is 16.4% higher year to date. While both are strong moves higher after a dismal 2022, the reality is the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla), which make up 28% of the S&P 500, have accounted for almost 65% of the yearly returns for 2023. In addition, the combined weight of those companies is greater than any combined weight of the top seven companies in the venerable index since the late 1990s.
Savvy investors who bought these stocks as they were getting hammered late in 2022 have done outstanding, but it is likely time to take profit and look for some new ideas. Aggressive growth tech investors looking to stay in the technology game need only to look at some of the Magnificent 7’s brethren for top ideas for the rest of 2023.
We screened our 24/7 Wall St. technology research universe and found five top sector leaders that have taken a beating recently for a variety of reasons but still hold huge upside for patient investors. While these five stocks 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.
This large cap legacy technology giant was hit hard after posting solid results but offering a tepid sales outlook. Adobe Systems Inc. (NASDAQ: ADBE) operates as a diversified software company worldwide through the following three segments.
The Digital Media segment offers products, services and solutions that enable individuals, teams and enterprises to create, publish and promote content. Its Document Cloud is a unified cloud-based document services platform. The company’s flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, workers, marketers, educators, enthusiasts, communicators and consumers.
The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers and executives across the C-suite.
The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development and high-end printing, as well as Advertising Cloud offerings.
Adobe offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers and original equipment manufacturers.
Goldman Sachs reiterated its Buy rating and raised its $550 target price on Adobe Systems stock to $625. The consensus target is $604.81, and Monday’s closing share price was $532.42.
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