Given the big day last Friday and a positive start to the holiday shortened trading week Tuesday, maybe, just maybe, the markets are ready to sweep away the malaise that has hovered over stocks since the beginning of the year. With many bearish voices howling that a crash could be right around the corner, stocks have plunged into correction status in 2016, and technology has been battered as much as any sector.

A set of new research reports from JPMorgan focus in on three technology stocks that the analyst feels are poised for a solid rest of 2016. Two have been absolutely hammered, and one was upgraded after coming off a period of restriction. All are rated Overweight at JPMorgan

Broadcom

This is the combined entity that was formerly known as Avago Technologies and Broadcom. Broadcom Ltd. (NASDAQ: AVGO) is a leading designer, developer and global supplier of a broad range of analog and digital semiconductor connectivity solutions. Its extensive product portfolio serves four primary end markets: wired infrastructure, wireless communications, enterprise storage and industrial and other.

Applications for the company’s products in these end markets include: data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays.

The company produces radio frequency (RF) front-end for LTE-enabled Apple products. Wall Street estimates that the company does 15% of its total business with the iPhone maker. Additional estimates are that Broadcom has between a 13% and 17% revenue exposure to Apple in the wireless communications segment, which was guided up 10% or more quarter over quarter for the third quarter. Customer diversity and content for Samsung could be more than enough to offset slower Apple business.

Top Wall Street analysts like the leadership in the mobile, data center and broadband markets, and especially in the RF arena. Many on Wall Street see a cyclical rebound in industrial and communications demand.

Broadcom investors are paid a 1.45% dividend. The JPMorgan price target for the stock is $170, and the Thomson/First Call consensus price target is $171.31. Shares closed most recently at $126.24 apiece.

Micron Technology

This top technology stock was absolutely mauled last year, down over 60%, and now trades at a 3.38 price-to-cash-flow figure. Micron Technology Inc. (NASDAQ: MU) is a global leader in advanced semiconductor systems. Its broad portfolio of high-performance memory technologies-including DRAM, NAND and NOR flash, is the basis for solid state drives, modules, multichip packages and other system solutions. The company’s memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.
Micron and Intel announced last summer the availability of their 3D NAND technology, the world’s highest-density flash memory. Flash is the storage technology used inside the lightest laptops, fastest data centers and nearly every cell phone, tablet and mobile device. And the collaboration with Intel on the 3D XPoint also creates new opportunities in solid-state drives (SSDs). Micron may have the most room to improve in enterprise grade SSD controllers, which include the electronics that bridge the flash memory components to the SSD input/output interfaces.

The JPMorgan team notes that while memory demand fundamentals are still muted, and those conditions could continue to persist through the first half of this year, they feel that the company is executing well in a tough environment, and the value at current trading levels is compelling.

JPMorgan has a very strong $22.50 price target, while the consensus target is posted at $16.46. The stock closed Tuesday at $10.81 per share.

Zayo

This company had a well-received initial public offering (IPO) in 2014. Zayo Group Holdings Inc. (NYSE: ZAYO) provides comprehensive bandwidth infrastructure services in over 300 markets throughout the United States and Europe.

The company delivers a suite of dark fiber, mobile infrastructure and cloud and connectivity services to wireline and wireless customers, data centers, Internet content providers, high-bandwidth enterprises and government agencies across its robust 82,000 route mile network. Zayo also offers 45 carrier-neutral data center facilities across the United States and France. The company was the first to offer bandwidth shopping and buying in under two minutes through Tranzact.

Several Wall Street firms love the strong defensive business model and cite the company’s solid growth trajectory, the highly recurring revenue model, high incremental EBITDA margins, management’s experience and the ability to drive high returns on invested capital. Like others in the sector, Zayo’s favorable multiyear secular tailwinds, as well as the increased probability of a real estate investment trust (REIT) structure over the long term make it a solid buy for investors now.

Wall Street analysts who also like the stock have stressed that investors should focus on the long-term for the company, given quarter-to-quarter volatility with bookings. That was very evident recently as the company posted weak second-quarter 2016 fiscal earnings, with both revenues and adjusted EBITDA below the JPMorgan and Wall Street estimates. The analysts stay positive as they think the potential for solid top-line growth remains, and with shares trading lower due to the earnings fallout, the company may increase the stock’s buyback going forward.

JPMorgan lowered its price target to $29, and the consensus target price is at $32.46. The stock closed on Tuesday at $23.22 per share.

These JPMorgan picks are not for conservative accounts, but the firm has zeroed in on top companies that have very solid forward potential. Given the sizable sell off in the stocks of all three of these companies, acquiring shares at current levels makes good sense now.

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