Over the course of the past year, investors have experienced one of the most volatile and bizarre stock markets on record. It started with a massive one-month 35% drop that ended in March of 2020 and went on to an almost unfathomable rally during the worst pandemic in the United States in decades. Toss in record supply chain disruptions that have caused production delays, and rising prices that despite the Federal Reserve’s “transitory” commentary are having an impact, and you had all the ingredients for a wild and crazy ride.
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One surprising item we found when analyzing the S&P 500 winners and losers for the year to date was that four of the stocks that are down the most are technology leaders that for a variety of reasons have taken a beating. We decided to screen them against our 24/7 Wall St. research database, looking for Wall Street firms that had Buy ratings and were still very positive on these four top companies. Remember that no single analyst call should ever be used as a basis to buy or sell a stock.

AMD

This top semiconductor stock is down almost 19% year to date. Advanced Micro Devices Inc. (NYSE: AMD) operates as a semiconductor company worldwide. Its products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services. They also include server and embedded processors, and semi-custom system-on-chip products, development services and technology for game consoles.

AMD provides x86 microprocessors for personal computers under the AMD Ryzen, AMD Ryzen PRO, Ryzen, Threadripper, AMD A-Series, AMD FX, AMD Athlon, AMD Athlon PRO and AMD Pro A-Series processors brands. It provides microprocessors for notebook and 2-in-1s under the AMD Ryzen, AMD A-Series, AMD Athlon, AMD Ryzen PRO, AMD Athlon PRO and AMD Pro A-Series processors brands, as well as microprocessors for servers under the AMD EPYC and AMD Opteron brands. Its chipsets are sold under the AMD trademark.

The company reported outstanding results, with data center revenue doubling. BofA Securities said this:

Solid beat and raise with calendar 2021 sales growth now 50% year-over-year (vs. 37% prior); We reiterate our buy rating and raise the price objective with a path to long-term earnings-per-share of $4+. Like: improving supply; product cycles (Milan, Ryzen 5000, consoles, Radeon 6000); 1.3% to 4% of market share gains in first quarter 2021 estimated. Risks: tough PC compares post double-digit growth in 2020/21 estimated; growing competition from Intel (new CEO) and Arm based CPUs.

BofA Securities raised its $100 price target to $110. The Wall Street consensus target price is $104.92. The final Advanced Micro Devices stock trade for Monday came in at $74.65 a share.

This company has come into the spotlight as a potential takeover candidate, and its stock is down almost 10% this year. Citrix Systems Inc. (NASDAQ: CTXS) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and software as a service (SaaS) solutions to enable new ways for businesses and people to work better.
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Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. Strategic mergers and acquisitions and internal development have expanded Citrix’s addressable markets beyond access to legacy Windows applications to include desktop and server virtualization, team collaboration and application networking.

Jefferies recently said this:

We re-ran a previous survey in order to assess intentions among Citrix Systems customers to convert limited-use term licenses purchased during March-April 2020 to long-term contracts. The survey results were supportive and indicated that on average organizations plan to convert 75% of their limited-use licenses to recurring contracts and that a further 75% of these conversions will be deployed as term licenses. We noted that current year 2021 revenue growth guidance stands at +3-4% and we think that it can ultimately land in the high-single digits on the back of conversions which could add 3-4p points to growth and the Wrike acquisition which could add another 2-3pts to growth. Additionally, we have increased confidence in the calendar $10 free-cash-flow per share goal. Moreover, we pointed out that the company trades toward the bottom-end of its 13-18x free-cash-flow range.

Jefferies has a $180 price target on Citrix Systems stock, which is well above the consensus target of $150.92. Monday’s final trade was at $116.87 a share.

Qualcomm

This stock has rolled over and is down almost 15% this year, but it remains among the BofA Securities US 1 top stock picks. 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.

Analysts believe Qualcomm’s RF technology has found significant traction at the two key smartphone original equipment manufacturers, along with others, and that RF represents a significant incremental revenue opportunity for the company, characterized by high average selling prices, ever-growing content and market share gains.
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Shareholders receive a 2.09% dividend. The massive $200 BofA Securities price target compares with the $171.35 consensus target. Qualcomm stock ended Monday trading at $129.80 a share.

ServiceNow

This stock had an incredible 2020 but is down almost 17% this year. ServiceNow Inc. (NYSE: NOW) develops and sells a hosted, subscription-based suite of services designed to automate various IT department functions, such as help desk, operations management and change/release management.

The company also sells a number of applications that automate various self-service related applications outside of the IT department, such as HR onboarding, facilities requests and governance, risk and compliance. The stock remains a top pick at BofA Securities, which noted this after the company’s recent analyst day:

We attended ServiceNow’s virtual analyst day. We view reiteration of the fiscal year 2024 target of $10 billion + revenue (representing 22%+ compounded-annual-growth -rate from fiscal 2020) and 26.5% targeted margin target (or 1% annual expansion) as a neutral. We view the fiscal year 2026 revenue target of $15 billion as a positive, suggesting expected 4 year compounded-annual-growth-rate of 22%+ sustaining in fiscal 2025 and 2026

BofA Securities has set a $600 price target, but that is less than the consensus target of $606.96. Service Now stock closed at $454.40 on Monday.

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Shares of these four technology giants are for various reasons down big this year. While more suited for aggressive growth investors, these stocks may be poised to have a very solid second half of 2021 as supply chain and additional issues are resolved and overall economic conditions trend back to normal. Despite the recent selling in all four, it still may make sense to scale buy the shares as we are approaching the summer and its slower trading volumes.

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