Jefferies 3 Top Technology Growth Stocks To Buy

By Lee Jackson Published Jul 27, 8:36AM EDT

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Despite the stock market getting bombed last week, and the Dow Jones Industrial Average actually falling back into the red for the year, things may not be all that bad. Current economic data like the June Chicago Fed National Activity index rose to a level that reflects above trend growth for the first time since last December, and leading indicators suggest better economic activity going forward.

In a new report from Jefferies, they say the best growth stocks to own may be the ones already blowing away earnings numbers. The top stocks to buy have already pounded analysts estimates and could be going much higher. Their take is that these stocks are the ones to own even if you are somewhat worried about the market.

Amazon.com, Inc. (NASDAQ: AMZN) is the absolute leader in online retail and is also dominating in its AWS cloud storage business and it just crushed earnings last week. Despite a huge run up on Friday of almost 10%, the Jefferies team says investors can still buy the stock. Despite currency headwinds that amounted to $1.4 billion, the company still had worldwide unit growth that jumped 22% in the quarter. Plus, AWS revenues increased an astounding 81% to $1.8 billion and that was $400 million more than the analysts estimates.

The Jefferies analysts raise their earnings-per-shares estimates in a big way looking for $6.41 in 2016. The Jefferies price target for the stock jumped up to $730, and the Thomson/First Call consensus target is posted at $638.13. versus a $529.42 close.

Infinera Corporation (NASDAQ: INFN) is another solid pick for investors in data networking, with Intelligent Transport Networks for network operators, enabling reliable, easy to operate, high-capacity optical networks. Intelligent Transport Networks enable carriers, Cloud network operators, governments and enterprises to automate, converge and scale their data center, metro, long-haul and subsea optical networks.

The company also blew away earnings estimates last week, and the Jefferies team also continues to recommended buying shares. Revenues came in at $207.3 million up 25% year-over year and 3% ahead of Wall Street expectation. The company also provided forward guidance that was very strong.

The Jefferies analysts think the company could announce at the planned October 6th analyst day a Metro Core Wavelength- Division Multiplex or WDM product, which might expand its addressable market from $4.5 billion to $15 billion over time. Jefferies’ price target for the stock is raised to $30 from $27, and the consensus is at $24.50 after closing at $23.06.

VMware Inc. (NYSE: VMW) also reported very solid numbers but is down huge over the last year and a half. It is the leader in virtualization technology solutions with 2014 revenues of $6 billion. VMware has more than 500,000 customers and 75,000 partners. The company reported very solid earnings which they had reaffirmed earlier this month.

Jefferies analysts feel that the company is very well positioned for the rest of the year and should benefit from increased government spending and continued ramp up in new products, and new and renewed Enterprise License Agreements or ELA’s in 2016.

VMware reported earnings, adjusted for one-time gains and costs that came to 93 cents per share. The results surpassed Wall Street expectations. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of 91 cents per share. Revenue was right in line with expectations at $1.6 billion on an adjusted basis. The Jefferies price target for the stock is $104, and the consensus is posted at $95.28. The shares closed Friday at $86.11 up over 5%.

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The Jefferies team is smart in recommending companies that have already come in with outstanding results and solid forward guidance. In a nervous market staying with those already on-a-roll makes good sense.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.