Stocks That Should Double: Tech (AAPL)(QCOM)(ADBE)(NOK)(YHOO)

This week 24/7 Wall St. is picking several stocks that are likely to double off of their lows.  The timeframe is by the end of 2010, which is meant to coincide with some form of economic recovery next year.  This is not based on a sharp turn up in the economy. A number of the credit and financial issues facing the markets will be in place for the near-term or longer.  The other assumption used for choosing the stock prices is a market bottom of 600 on the S&P 500 Index.

These are the five stocks from the tech sector.

Qualcomm (QCOM) stands to benefit as much as any other company in the world as 3G wireless networks continue to expand. The firm earns a royalty on almost all 3G handset sales. Brokerage firm Hilliard Lyons recently said that it expects 3G phones will be 70% of all sales in the market by 2012, up from the current level of 40%.  Qualcomm has huge operating margins and more than $6 billion in cash and short-term investments.  Most of its intellectual property legal problems appear to have been or are on their way to being settled. Most forecasts show handset sales picking up in 2010.

Yahoo! (YHOO) is a “one event” stock. It will probably lay off a large number of people this year. Display and search advertising may even improve.  But, the catalyst for a sharp increase in Yahoo!’s shares is that Microsoft (MSFT) will make a very attractive offer to take over the portal’s search operation. It will bring in enough cash and have high enough royalty payments that the stock will move back toward where it traded a year ago.

Apple (AAPL) has fallen sharply as analysts revise downward their earnings for the year. Most have cut estimates for Mac, iPhone, and iPod sales. Expectations for the next two quarters are low. Apple will continue to pick up market share in the handset and computer sectors, offsetting most of the effects of the overall softness in those industries. The Apple iPhone App store currently has15,000 applications and more than half a billion downloads. A large number of software programmers are using the iPhone as their platform of choice. Apple sales will be better than expected.

Adobe (ADBE) still holds the pole position in the multimedia software business event though the recession has undercut sales of its new Creative Suite 4 products. Adobe will probably launch its next generation of the product by the middle of next year. The upgraded application plus an improving tech market should drive up sales. Adobe is already aggressively cutting costs.

Nokia (NOK) shares have dropped over 70% in the last year even though it still has close to 40% of the global handset market. This year is expected to be the first year in recent memory when cellphone sales are down. As demand recovers, especially in emerging markets, Nokia’s revenue should begin to move up. The company is building software and multimedia applications to make its products more attractive for uses beyond basic voice applications. Nokia has a strong balance sheet and continues to generate substantial cash each year.

Douglas A. McIntyre