With Presidents Day, Valentine’s Day and Mardi Gras over, and just six weeks left in the first quarter of 2021, many investors are looking past earnings season to next quarter and the rest of 2021 s they start to reset portfolios. Many investors still are very nervous, especially given the massive rally since the start of the year that has pushed all of the major indexes and the Russell 2000 to all-time highs. Yet, the overall take is one of slow but steady going forward, given the incredible run in the equity markets and the potential for a growing economy due to the COVID-19 vaccine being distributed nationally and another round of stimulus payments in the queue.

In a series of new reports, Goldman Sachs raised and reiterated the price targets on stocks of some companies that delivered the goods in a big way during earnings season. Given the levels of the price targets, all still look to have some very solid upside potential. Here we spotlight three momentum tech stocks rated Buy in which the analysts have hiked the price targets significantly higher on two and reiterated one on another. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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Kornit Digital

This off-the-radar stock has been rising for almost a year and shows no signs of letting up. Kornit Digital Ltd. (NASDAQ: KRNT) develops, designs and markets digital printing solutions for the fashion, apparel and home decor segments of the printed textile industry worldwide. The company’s solutions include digital printing systems, ink and other consumables, associated software, and value-added services.

Its products and services include direct-to-garment printing systems from smaller industrial operators to mass producers; NeoPigment ink and other consumables; QuickP designer software; and maintenance and support and professional services. The company serves decorators, online businesses, brand owners and contract printers.

Kornit Digital posted blowout results, and the Goldman Sachs analysts said this:

Kornit reported another strong quarter with broad-based demand outperformance as the company continues to see tailwinds from the shift to digital printing and e-commerce. We are upgrading our rating to a Buy as numbers materially outpace our forecasts. The company also announced new 3D textile printing applications for embroidery, high-density printing, and vinyl heat transfer effects, potentially increasing the TAM by 25% – 30%. While we had originally believed that current growth might be unsustainable as we exit COVID we are increasingly convinced that COVID has actually accelerated adoption of personalized fashion enabling technology.

Goldman Sachs upgraded the shares to Buy from Neutral and raised the price target to $135 from $83. The much lower Wall Street consensus target is $81.29, and shares were last seen trading on Wednesday at $116.85 apiece. That was up almost 20% on the day.

Palantir

This company came public as a direct listing and struggled out of the gate, but the stock seems to be taking off now. Palantir Technologies Inc. (NASDAQ: PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.

The company offers Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals to intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data, and it allows individual users to integrate and analyze the data they need in one place.
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The company reported very solid earnings and offered encouraging forward guidance. The analysts said this:

Palantir reported strong fiscal fourth quarter results, including revenue and EBIT that came in 6% / 115% ahead of our estimates. Fiscal first quarter guidance called for revenue growth of 45%, while fiscal year 2021 revenue guidance was for 30%+, likely implying some deceleration throughout the year. However, we were encouraged to see management guide to $4 billion of revenue in fiscal year 2025, implying a 30% 5-year compounded annual growth rate from 2020. With a growing backlog of $2.8 billion in deal value (+31% y/y), we believe there is increasing visibility into the achievability of that long-term target. Also, we believe recent efforts to modularize Foundry and add channel partners like IBM should improve product market fit for the commercial business in the coming quarters.

Goldman Sachs also upgraded this one to Buy from Neutral, and the $13 price target rose to $34. The consensus target is $19.83, and Wednesday’s closing print for Palantir Technologies stock was $27.08, which was down almost 3% for the day.

Splunk

This is a top tech pick across Wall Street. Splunk Inc. (NASDAQ: SPLK) provides a software platform for collecting, storing, indexing, searching and analyzing machine-generated data, such as log files and configuration files, which are prevalent in every type of IT system, device and application.

Splunk technology is potentially applicable and disruptive in several market segments, including IT operations, security and compliance, and business intelligence. These market segments are collectively worth $28 billion today.

Wall Street analysts agree that the company offers the de facto standard for security information and event management. It also offers orchestration solutions for security operations, a fast emerging category of products. Goldman Sachs feels new cloud efforts are not being realized across Wall Street, and its report said this:

We believe Splunks’ cloud transition is largely underappreciated by investors. SPLK’s defensible product portfolio backed by a solid technological core spanning security, apps performance, cloud infrastructure monitoring, DevOps and Observability coupled with its large 20K installed base of enterprises are potentially powerful levers to enable a transition to the cloud (30% of revenues at ~80% y/y). SPLK is poised to hit an inflection point where the cloud could hit 50% of annual recurring revenue in the next 2 years.

Goldman Sachs reiterated its Buy rating and $240 price target on Splunk stock. That compares to the consensus target of $203.51 and the most recent close at $170.50 per share.

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These are three top stocks for investors with plenty of risk tolerance to consider for aggressive growth portfolios. With earnings out of the way, and the market fully priced at current levels, it may make sense to scale buy positions and see if we don’t get a pullback as the month rolls on.

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