Here are analysts’ favorite tech stocks for 2023
After a dismal 2022, Wall Street is bullish on some tech stocks this year. The technology sector has been hit hard over the past year as worries about economic weakness and the Federal Reserve’s aggressive stance on raising interest rates to curb inflation weighed on companies. In particular, rising interest rates hurt the present value of future earnings streams from tech stocks. The tech-heavy Nasdaq Composite plunged 33% last year, falling more than the S&P 500 and Dow Jones Industrial Average. The Technology Select Sector SPDR Fund (XLK), a fund that corresponds to the technology sector of the S&P 500, fell 28% in 2022. Still, there are some bright spots in the sector where Wall Street analysts are predicting growth. To determine which technology stocks could outperform in 2023, CNBC Pro used FactSet data to examine the members of the Technology Select Sector SPDR ETF and ranked them by those with buy ratings from at least 60% of analysts. CNBC then filtered for those companies that have upside potential of 20% or more versus the consensus price target to come up with a list of 14 technology stocks set to gain in the coming year. Tech names Wall Street is optimistic The potential top performer on the list is an energy technology company, Enphase Energy. The stock is up nearly 45% in 2022 and could climb another 43% this year, according to Wall Street analysts’ consensus price target. Deutsche Bank began coverage of the stock in November with a buy rating and a price target of $330, signaling a 43% rise since the close on Tuesday. According to analyst Corinne Blanchard, the rating reflects the company’s position to benefit from a growing solar energy market in the United States. Also on the list is SolarEdge Technologies, another energy technology name. Analysts expect it to gain more than 26% in the coming year. ServiceNow is second on the list, with 77% of analysts rating the company a Buy, and the consensus price target for this year expects an increase of more than 37%. In a Nov. 17 statement, Morgan Stanley named ServiceNow its top choice in the software sector. “The transition from the System of Record in IT to the System of Action bridging multiple systems across the business significantly expands growth opportunities and coupled with the units’ best-in-class economics underpins our confidence in sustained FCF growth of over 30% for the fiscal year 23/24,” wrote analyst Keith Weiss. Similar stocks on the list include Salesforce, Fortinet, and Tyler Technologies, which analysts say are up more than 28%, 36%, and 33%, respectively. CNBC’s analysis also highlighted a few payment companies. Of those names, analysts see the biggest potential gain in PayPal, which is expected to soar more than 35% this year. In September, Raymond James said he expected PayPal to rise 30% and that it was a stock investors should own in a weak economic environment. According to analyst John Davis, the company has made the necessary changes over the past few quarters to deliver solid performance going forward. Global Payments is another payment name on the list. Wall Street expects it to rise more than 33% over the next year. Some of the latest names in the group are Microsoft and Intuit, which analysts say are up more than 25% and more than 21%, respectively, this year. Both stocks collapsed amid the tech crisis in 2022, but are now trading at more attractive levels so investors can jump in and ride any wave higher. – CNBC’s Michael Bloom contributed to this report.
https://www.cnbc.com/2023/01/11/here-are-analysts-favorite-tech-stocks-for-2023.html Here are analysts’ favorite tech stocks for 2023
