BofA Securities US 1 List Has 4 Must-Own Technology Stocks for 2021

By Lee Jackson Updated Oct 22, 9:50AM EDT · Published Oct 22, 8:31AM EDT

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BofA Securities US 1 List Has 4 Must-Own Technology Stocks for 2021 — © jetcityimage / iStock Editorial via Getty Images

For years, the so-called FAANG stocks and the various different iterations have dominated tech investing and almost single-handedly have driven stock market gains. Social media, e-commerce, cloud computing and much more has become ubiquitous and undoubtedly will remain so for decades to come. Perhaps it may be time for investors to set their sights on some technology ideas that can rule the roost in the years to come.

We screened the BofA Securities US 1 list, which contains 36 stocks that are the firm’s top analysts’ best ideas now for institutional and high net worth retail investors, for the technology stocks that make the cut. We were intrigued that only two companies, one which is diversifying rapidly, are members of the FAANG club. The rest offer aggressive growth investors some unique opportunities and do not appear to be as overbought as many of the mega-cap favorites.

While these four stocks are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Amazon

This is the absolute leader in online shopping and remains a technology anchor on the US 1 list of top stock picks. Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers. It has one of the most valuable brands in the world.
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The company serves developers and enterprises through Amazon Web Services, which provides computing, storage, database, analytics, applications and deployment services that enable virtually various businesses. AWS is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market.

Like every year, online sales should continue to grow, especially during the busy Christmas shopping period, as Amazon remains the go-to portal for shoppers looking for holiday bargains and a way to stay out of brick-and-mortar stores this year if they choose to.

BofA Securities has a $3,560 price objective for the shares, while the Wall Street consensus target price is $3,724.98. The last Amazon.com stock trade on Wednesday came in at $3,184.94.

Lam Research

This remains one of the top chip equipment picks across Wall Street. Lam Research Corp. (NASDAQ: LRCX) is a leading global supplier of wafer fabrication equipment and services for semiconductor manufacturing, with core competencies in deposition, etch and clean equipment.

These systems play a critical role in enabling Lam Research customers to make chips smaller, faster and more performant. The company’s major customers include leading semi memory, foundry and integrated device manufacturers, such as Samsung, TSMC and Intel.

The company is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2020. Lam Research is expected to post quarterly earnings of $5.17 per share in its upcoming report, which represents a year-over-year gain of 62.6%. Revenues are expected to be $3.10 billion, up 43.1% from the year-ago quarter.

Holders of Lam Research stock receive a 1.43% dividend. BofA Securities recently raised its price objective to $365 and it looks to press higher soon. The posted consensus target price is $390.91, and the stock closed at $366.62 per share on Wednesday.
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Qualcomm

This stock has made a solid move off the March lows but looks poised to go even higher in 2021. Qualcomm Inc. (NASDAQ: QCOM) designs, develops and supplies semiconductors and collects royalties on wireless handheld devices and infrastructure based on its dominant position in CDMA and other related technology patents.

In addition, Qualcomm provides systems software and components to wireless handset vendors and promotes applications and services that run on high-speed wireless networks. The company operates primarily through two segments: CDMA Technologies and Technology Licensing.

5G should prove to be big for the company, and the analysts said this:

Apple recently announced its new iPhone 12 line-up, with all SKUs featuring 5G connectivity and millimeter wave capabilities. The event read positively for Qualcomm, the only RF vendor shipping mmWave solutions at volume, with 100% share of the market. We raise our estimates on the higher-than-expected mmWave attach-rate and increase our price target.

Shareholders receive a nice 2.02% dividend. The $145 BofA Securities price target was raised to $165, well above the $129.79 consensus target. Qualcomm stock closed most recently at $128.55 a share.
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Salesforce

Shares of the company were tagged during the September tech sell-off and are offering a nice entry point. Salesforce.com Inc. (NYSE: CRM) offers enterprise cloud computing applications and platform services, including Sales Cloud that 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 connect their service agents with customers on various devices, and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

In addition, Salesforce announced last year it has completed its acquisition of Tableau Software, bringing together the world’s number one customer relationship management company with the world’s number one analytics platform. Salesforce aims to enhance its digital advertising value proposition (and its other existing product offerings) by expanding its data footprint to become the pioneer supplier of a consumer data platform for the corporate market.

The analysts have set a $280 price objective. That compares to the $275.89 posted consensus target and the final print for Salesforce.com stock on Wednesday at $254.23.
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Whether it is cloud computing, e-commerce, new semiconductor designs and manufacturing for 2021 and beyond, a big 5G exposure, expanding digital advertising or customer relationship management software expansion, each of these companies brings some tantalizing technologies and products to the table for next year, and their stocks make sense for aggressive accounts perhaps looking to shift some capital to new ideas.

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.