Despite a beat down to end last week, the Nasdaq is still up a stunning 32% so far in 2023, while the S&P 500 is 16.4% higher year to date. While both are strong moves higher after a dismal 2022, the reality is the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla), which make up 28% of the S&P 500, have accounted for almost 65% of the yearly returns for 2023. In addition, the combined weight of those companies is greater than any combined weight of the top seven companies in the venerable index since the late 1990s.
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Savvy investors who bought these stocks as they were getting hammered late in 2022 have done outstanding, but it is likely time to take profit and look for some new ideas. Aggressive growth tech investors looking to stay in the technology game need only to look at some of the Magnificent 7’s brethren for top ideas for the rest of 2023.

We screened our 24/7 Wall St. technology research universe and found five top sector leaders that have taken a beating recently for a variety of reasons but still hold huge upside for patient investors. While these five stocks are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Adobe

This large cap legacy technology giant was hit hard after posting solid results but offering a tepid sales outlook. Adobe Systems Inc. (NASDAQ: ADBE) operates as a diversified software company worldwide through the following three segments.

The Digital Media segment offers products, services and solutions that enable individuals, teams and enterprises to create, publish and promote content. Its Document Cloud is a unified cloud-based document services platform. The company’s flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, workers, marketers, educators, enthusiasts, communicators and consumers.

The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers and executives across the C-suite.

The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development and high-end printing, as well as Advertising Cloud offerings.

Adobe offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers and original equipment manufacturers.

Goldman Sachs reiterated its Buy rating and raised its $550 target price on Adobe Systems stock to $625. The consensus target is $604.81, and Monday’s closing share price was $532.42.

Despite some exciting new products like the iPhone 15, the stock has lagged dramatically. Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets consumer electronics worldwide, including the iPhone line of smartphones, the Macintosh family of notebook and desktop computers, iPad multi-purpose tablets, and such wearables and accessories as AirPods, Apple TV, Apple Watch, Beats and HomePod.
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It also provides AppleCare support and cloud services, and it operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts.

Its services include Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service. Apple also licenses its intellectual property.

The company serves consumers, and small and mid-sized businesses and the education, enterprise and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force, as well as third-party cellular network carriers, wholesalers, retailers and resellers.

Shareholders receive just a 0.55% dividend. Wedbush’s $240 target price is a Wall Street high. Apple stock has a consensus target of $200.11, and the shares ended Monday trading at $177.97.

CrowdStrike

This cybersecurity giant’s stock is way below its 52-week high and offers an outstanding entry point. CrowdStrike Holdings Inc. (NASDAQ: CRWD) provides cloud-delivered protection across endpoints and cloud workloads, identity and data. The company offers threat intelligence, managed security services, IT operations management, threat hunting, Zero Trust identity protection and log management.

CrowdStrike primarily sells subscriptions to its Falcon platform and cloud modules through its direct sales team that leverages its network of channel partners.

Still down a stunning 30% from highs printed early last year, shares of this preeminent company offer investors one of the best ways to participate in the huge growth proposition cybersecurity offers.

The JMP Securities price target of $235 is well above the consensus target of $185.86. CrowdStrike stock closed on Monday at $166.97.

Etsy

This tech favorite stock has been cut in half over the past year and may offer the best value of all. Etsy Inc. (NASDAQ: ETSY) operates two-sided online marketplaces that connect buyers and sellers, primarily in North America, Europe, Australia and India. Its primary marketplace is Etsy.com, which connects artisans and entrepreneurs with various consumers.
Etsy also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. It also provides various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Etsy Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, and Australia to purchase discounted shipping labels.
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Etsy also provides various seller tools, including Shop Manager dashboard, a centralized hub for Etsy sellers that includes the ability to manage inventory, check order status, receive notifications about repeat customers, add photos and listing videos, and purchase and print shipping labels.

Its educational resources include blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums and insights, Etsy Teams (a platform to build personal relationships with other Etsy sellers) and a Star Seller program. As of December 31, 2022, it connected a total of 7.5 million active sellers to 95.1 million active buyers.

Etsy stock has a $126 target price at Truist Financial. That compares with a $107.67 consensus target and Monday’s closing print of $63.85.

Oracle

This top software stock posted in-line results but had soft forward guidance despite a big AI initiative. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide.

The company licenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. Its Oracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

Last year, Oracle and Cerner closed an agreement for the former to acquire the latter through an all-cash tender offer for $95 per share, or approximately $28.3 billion in equity value. Cerner is a leading provider of digital information systems used within hospitals and health systems to enable medical professionals to deliver better health care to individual patients and communities.

Oracle stock comes with a 1.40%. HSBC Securities recently began coverage, and its $144 price objective is well above the $127.25 consensus target and Monday’s $112.21 close.

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While the Magnificent 7 may very well have some more upside, after a huge run for most of the names, it makes sense to take some profit and move to these five top companies. All are proven long-term leaders, and all should rebound smartly from any recent issues that have kept the shares down.

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