Merrill Lynch Raises Price Targets on 3 Top Tech Stocks to Buy

By Lee Jackson Updated Jan 13, 7:48AM EST · Published May 20, 8:20AM EDT

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[cnxvideo id=”655408″ placement=”ros”]While the overall stock market appears to be teetering as the fears of a rate rise become more pronounced, one area that has suffered as investors piled into oil stocks and gold over the past three months has been technology. The fact of the matter is that companies in the right segments of technology are doing outstanding, and with the growth of cloud computing and storage seemingly unstoppable, there could be more positive news to come.

In a host of new reports, the analysts at Merrill Lynch update tech stocks rated Buy and they raise their price targets on three of them. All are well suited for more aggressive, risk-tolerant investors.

Analog Devices

This stock is still trading way below levels printed last summer. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide. It offers signal processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

The company has faced some selling pressure as its exposure to Apple remains intact, as it supplies the processors that enable 3D Touch in Apple products. Analog Devices is reported to be the sole supplier for the 3D touch processor to Apple. The Merrill Lynch analysts cite the company’s strong core business-to-business trends as a positive.

Analog Devices investors receive a solid 3.05% dividend. The Merrill Lynch price target was lifted to $61 from $57. The Thomson/First Call consensus price target is $59.44. The stock closed most recently at $55.70.
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Salesforce.com

Once again this tech powerhouse reported outstanding numbers and the stock took off. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide. It offers enterprise cloud computing applications and platform services, including Sales Cloud, which enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connects their service agents with customers on various devices. Marketing Cloud enables companies to plan, personalize and optimize customer interactions.

The company blew away first-quarter earnings estimates with a large billings beat, and virtually every platform and product area the company has posted much higher numbers than almost anyone expected. In addition, the company raised guidance for the rest of the fiscal year.

The Merrill Lynch price target went to $100 from $90, and the consensus target is $90.60, but that almost assuredly will go higher as well. The stock closed Thursday at $81.09, up over 4% on the day.

Take-Two Interactive Software

This top video game producer has cashed in with some super-hot titles. Take-Two Interactive Software (NASDAQ: TTWO) offers its products under labels such as Rockstar Games and 2K. It develops and publishes action/adventure products under the Grand Theft Auto brand, as well as other franchises, including Civilization, Borderlands, Bioshock and Red Dead under the Rockstar Games label. The Grand Theft Auto franchise has been one of the best-selling video games ever released.

The company also reported outstanding earnings for the most recent quarter, but it did push guidance lower than current levels. The Merrill Lynch analysts are very bullish on the next Rockstar title, and the fact that the company raised its 2018 fiscal year estimates.

Merrill Lynch raised its target price to $44, and the consensus estimate is at $41.17. The stock closed trading on Thursday at $37.29.
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While the market looks ready for a tumble, the stocks reporting good numbers still look very attractive. All three of these companies would be good additions to long-term aggressive growth accounts.

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.