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Analysts at Goldman Sachs emphasized that some tech stocks have room to rise as earnings season begins to wind down. The S&P 500 tech sector’s earnings growth rate was 21.6% in the fourth quarter. That’s compared to a 9.5% expansion in earnings for the entire S&P 500 last quarter, according to LSEG (formerly Refinitiv). CNBC Pro scoured Goldman Sachs’ top research to find the company’s best ideas in technology. All of the names below are rated Buy. These include Arista Networks, Arm Holdings, Monday.com, AppLovin, and ASML Holding. Arm analyst Toshiya Hari backs the semiconductor and software design company’s stock. Arm released a shocking fiscal third-quarter earnings report earlier this month, but the company says the sky is the limit. In fact, in 2024, the stock price will rise by a whopping 70%. Hari said he expects Arm to “expand its reach across applications where indexing is underutilized today, including data centers, automotive, and more.” [Internet of Things]The company is particularly bullish on Arm’s data center business, which boasts customers from heavyweights such as Microsoft, Nvidia and Amazon. Arm also has “strong profit margins,” the company said. On the other hand, there is a possibility of further upside in the future. “Looking to the future, we expect Arm to demonstrate strong operating leverage over the medium to long term, while making appropriate investments to address its growing business, as we demonstrated in our commencement report.” he added. [total addressable market]Analyst Kash Langan said project management software company Monday.com is fully committed, saying, “Monday.com has set more conservative revenue and operating margin guidance for 2024. However, the company reported solid fourth-quarter results across all metrics,” the analyst said. Langan said after the company’s quarterly report. But despite the conservative guidance, Langan said there are plenty of untapped growth opportunities and is supportive of the stock. In particular, Monday.com said it is well-positioned to expand its reach in the following areas: He added: “As the macro environment starts to improve, we could see further organic expansion on Monday, benefiting sales efforts. Stocks should rise about 20% in 2024.” he added. We see Monday.com with ample runway for growth with revenue growth, a move into the enterprise market, a large unpenetrated TAM, and a strong competitive moat.” said. The company expects sales this year to be flat compared to 2023. Nevertheless, the stock is up about 23% this year, and analyst Alexander Duval expects further gains to follow. “Explanation since then” [the] Q4 2023 results reflect short-term modulation and [a] “Solid 2025 Ramp Ramp,” Duval recently wrote. The company said geopolitical risk is low as orders and demand remain strong and the company’s exposure to China is fairly minimal. Additionally, Duval said ASML has a “deep competitive moat” in the extreme UV space. Lithography technology, also known as EUV, is used to make microchips. Duval acknowledged that ASML’s stock lags some of its semiconductor peers, but there is still room for it to rise. He said there was only one. He further added, “While the company’s stock price has outperformed its global half-cap peers since its Q4 2023 results, the current stock price and valuation still do not reflect ASML’s strong growth story. I think so,” he added. winner. … As a leading branded provider of switches for hyperscalers in the United States, ANET is driven by continued data growth, ongoing digital transformation that drives workloads from on-premises to public and hybrid clouds, and the demand for higher bandwidth. are in a good position to take advantage of the rise in Arm: “Consistent with our founding assertion, Arm expects to grow dollar content on smartphones primarily through increased royalties, but also to expand its reach across applications.” Indexes for data centers, automotive, IoT, etc. are missing. …Looking forward, as we demonstrated in our opening report, we expect Arm to demonstrate strong operating leverage over the medium to long term while making appropriate investments to address its growing TAM. While our 2024 sales and operating margin outlook is more conservative, we also see more organic expansion on Monday and could benefit sales efforts as the macro environment begins to improve. . …With solid revenue growth, a move into the enterprise market, large unpenetrated TAM, and strong competitive positioning, we believe Monday.com has ample runway for growth. . ” ASML “Although the stock price has increased +19% since earnings, we believe the stock price has still lagged behind sub-market capitalization peers over the past 12 million years and, in our view, has room for further upside.” …we believe that current valuations do not fully capture the opportunity for improved near-term visibility and improved AI demand dynamics across various end markets and substantially higher growth. We continue to believe in ASML’s deep competitive moat in EUV technology… Comments after Q4 2023 earnings further strengthen our confidence in near-term modulation and solid growth in 2025. This trend We started 2023 with strong adjusted EBITDA growth based on operating momentum in our software business and a growing revenue base. Over the long term, we continue to see the company generating growth and higher profit margins than the industry average.”
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