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Analysts Are Increasing Prices Targets of These 10 Tech Stocks

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·13 min read
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In this article, we discuss 10 tech stocks that analysts are increasing the price targets of. If you want to see some more tech stocks that were favored by market experts recently, click Analysts Are Increasing Prices Targets of These 5 Tech Stocks.

The COVID-19 pandemic propelled the technology sector into overdrive, in terms of growth, revenues, earnings, and use cases. Artificial intelligence, augmented and virtual reality, blockchains, and cloud computing remained at the forefront of the technology space in 2021, and organizations around the world upskilled to catch up.

Everything-as-a-service (XaaS) remains the dominant theme in 2022, as companies attempt to create superior supply chains that are transparent and resilient, navigate a hybrid workforce, and address crucial sustainability challenges. Industry leaders are focused on sustaining their underlying operations in 2022, rather than focusing solely on growth, as is the norm in the technology sector.

The Nasdaq 100 Index, a technology-focused benchmark, is down 13% year-to-date, and prominent players like Netflix, Inc. (NASDAQ:NFLX), Meta Platforms, Inc. (NASDAQ:FB), and Adobe Inc. (NASDAQ:ADBE), among others, each posted losses of more than 20%. The broader technology selloff is impacting tech startups in the Silicon Valley as well.

Amid the mixed market sentiment around tech names, Brian Daley, head of equity strategy in the chief investment office for Merrill and Bank of America Private Bank, said on April 20 that a sector as vast and widespread as technology cannot be forsaken or left behind. Ignoring tech stocks and eliminating positions could lead to portfolio risk. He is of the view that the recent market selloff and economic uncertainty has made big, quality tech names affordable. He sees it as an attractive entry point into companies that have offered proven track records and solid earnings over the years.

Frederic Legrand - COMEO / Shutterstock.com

Some of the most notable tech stocks include Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), among others discussed at length below.

Our Methodology

We selected the technology stocks that analysts increased the price targets of in the last week. We have mentioned the analyst ratings and hedge fund sentiment around the securities. Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.

Analysts Are Increasing Prices Targets of These Tech Stocks

10. Snap Inc. (NYSE:SNAP)

Number of Hedge Fund Holders: 55

Snap Inc. (NYSE:SNAP) is a California-based social media company that offers products like Snapchat, Spectacles, and Bitmoji. Snap Inc. (NYSE:SNAP) is one of the top metaverse contenders, with expertise in augmented and virtual reality.

On April 19, Citi analyst Ronald Josey upgraded Snap Inc. (NYSE:SNAP) to Buy from Neutral, lifting the price target to $50 from $41. The analyst's best picks in the internet sector are Amazon, Snap, Airbnb, and DoorDash, and he noted they are all leaders in their own categories that continue to innovate new products and services. The broader internet sector is "healthy", as digital consumer engagement continues to be immersive and advances, added the analyst. He sees "multiple vectors ahead for sustained growth".

Snap Inc. (NYSE:SNAP) announced on March 23 that it has acquired NextMind, a Paris-based neurotech company. NextMind will enable Snap Inc. (NYSE:SNAP) to enhance its long-term augmented reality research efforts. Snap Inc. (NYSE:SNAP) will thus achieve easier hands-free interaction with electronic devices, including computers, AR/VR wearables, and headsets.

According to Insider Monkey’s Q4 data, 55 hedge funds were bullish on Snap Inc. (NYSE:SNAP), with collective stakes amounting to $4.15 billion. Stephen Mandel’s Lone Pine Capital is the leading position holder in the company, with 33.4 million shares worth $1.5 billion. In addition to Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), Snap Inc. (NYSE:SNAP) is a notable tech stock to watch.

Here is what Baron Opportunity Fund has to say about Snap Inc. (NYSE:SNAP) in its Q4 2021 investor letter:

“Snap Inc. is the leading social network among teens and young adults in North America and a growing number of overseas markets, including Western Europe and India. Shares fell this quarter on a greater than anticipated impact from Apple’s new privacy changes for iOS mobile devices. These changes made it more difficult for Snapchat to measure the effectiveness of ads shown on its platform. We believe this is a near-term, industry-wide issue for which Snap is already developing a solution. Longer term, we continue to view Snap favorably as the company sustains its rapid pace of product innovation and expands its premium partnerships with advertisers.”

9. Meta Platforms, Inc. (NASDAQ:FB)

Number of Hedge Fund Holders: 224

Meta Platforms, Inc. (NASDAQ:FB) is an American multinational technology conglomerate that is considered to be one of the Big Five American tech firms. In addition to Meta Platforms, Inc. (NASDAQ:FB)’s strides in the metaverse, its products include Facebook, Instagram, Messenger, WhatsApp, Oculus, Mapillary, Workplace, Portal, and Diem.

Citi analyst Ronald Josey on April 19 upgraded Meta Platforms, Inc. (NASDAQ:FB) to Buy from Neutral with a price target of $300, up from $258. The analyst sees the broader tech sector as "healthy" and believes that it is positioned for strong growth.

Meta Platforms, Inc. (NASDAQ:FB) announced on April 13 that it will charge 47.5% on the sales of digital assets that metaverse creators sell on its "metaverse" VR platform, Horizon Worlds. The company explained the fee breakdown – 30% is hardware platform fee for sales via Meta Quest Store, where apps and games for virtual reality headsets are sold, and 17.5% is charged for using the Horizon platform.

Amid the broader technology selloff, hedge funds pulled out of Meta Platforms, Inc. (NASDAQ:FB) in the fourth quarter of 2021. According to Insider Monkey’s Q4 data, 224 hedge funds were long Meta Platforms, Inc. (NASDAQ:FB), compared to 248 funds in the previous quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with 9.5 million shares worth $3.2 billion.

Here is what Cooper Investors Rowan Street Capital has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:

“We are not traders, hedgers, market timers or “renters of stock.” We are strictly business owners and compounders of capital! And just like Mark Zuckerberg who has never sold when the stock of Facebook had declined by 25% or 50%+, and have always focused exclusively on the long term fundamentals of their respective businesses, you should expect us to do the same with our portfolio companies. We have owned Meta Platforms (NASDAQ:FB) in the portfolio since 2018, and are just as optimistic and confident in the long term prospects of the company despite the recent drop in stock price.”

8. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 44

International Business Machines Corporation (NYSE:IBM) is a multinational technology company that specializes in automation, robotics, artificial intelligence, cloud computing, consulting, blockchain, computer hardware, software, and quantum computing. International Business Machines Corporation (NYSE:IBM) delivers a dividend yield of 4.64% as of April 21.

International Business Machines Corporation (NYSE:IBM) reported earnings for Q1 2022 on April 19, posting an EPS of $1.40, above consensus by $0.01. The $14.20 billion revenue also outperformed analysts’ expectations by almost $353 million.

On April 20, BofA analyst Wamsi Mohan raised the firm's price target on International Business Machines Corporation (NYSE:IBM) to $165 from $162 and maintained a Buy rating on the shares after the company’s "solid" quarterly results and a "strong" outlook for 2022. According to the analyst, International Business Machines Corporation (NYSE:IBM) now holds a defensive portfolio that can outperform in a difficult macro environment. He also sees sustained revenue growth beyond 2022.

Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a significant stakeholder of International Business Machines Corporation (NYSE:IBM), with 3.2 million shares worth $440.5 million. Overall, 44 hedge funds were bullish on the stock at the end of December 2021, up from 41 funds in the earlier quarter.

Here is what St. James Investment Company has to say about International Business Machines Corporation in its Q4 2021 investor letter:

“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.

One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties, and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)

7. CDW Corporation (NASDAQ:CDW)

Number of Hedge Fund Holders: 37

CDW Corporation (NASDAQ:CDW) was founded in 1984 and is headquartered in Vernon Hills, Illinois. It operates as a provider of information technology solutions in the United States, the United Kingdom, and Canada. The company offers hardware and software products, cloud capabilities, digital workspace, and network security.

Stifel analyst Matthew Sheerin upgraded CDW Corporation (NASDAQ:CDW) on April 14 to Buy from Hold with a price target of $210, up from $200. The analyst contended that the recent pullback presents a "compelling entry point", with shares down about 17% year-to-date. The outlook for IT spend is still positive and he remains confident about CDW Corporation (NASDAQ:CDW)’s potential to achieve a sizable market share, the analyst told investors in a bullish thesis.

In the fourth quarter of 2021, CDW Corporation (NASDAQ:CDW) reported earnings per share of $2.08, beating market estimates by $0.15. Revenue jumped 11.72% year-over-year to $5.54 billion, outperforming analysts’ consensus estimates by $310.40 million. CDW Corporation (NASDAQ:CDW)’s Q4 results were published on February 9, and the company also declared a quarterly dividend per share of $0.50, which was distributed on March 10.

According to Insider Monkey’s Q4 database, 37 elite hedge funds held bullish positions in CDW Corporation (NASDAQ:CDW), with combined stakes amounting to $2.3 billion. Select Equity Group is the biggest position holder in the company, with more than 7 million shares worth $1.4 billion.

Here is what Wedgewood Partners has to say about CDW Corporation (NASDAQ:CDW) in its Q1 2022 investor letter:

“CDW logged steady, double-digit revenue and operating earnings growth during the quarter as its “Omni-Office” strategy of outfitting small and medium businesses with software, hardware and services – wherever workers decide or need to work – continues to resonate. CDW organizes itself across several end-markets, with each of these end markets at different stages of building out its omni-office presences. As IT hardware has become increasingly scarce due to vendor shortages and strong demand, CDW has flexed its balance sheet in the short-term in order to ensure inventory availability for long-term customers to continue this omni-office buildout. We expect this pressure on inventory turns will eventually return to normal and help sustain historically high returns on capital. The market continues to be infatuated with software services and has overlooked the fact that software providers rely on CDW for distribution in the small- and medium sized business segment. CDW’s consistent returns, cheap multiple, and mission-critical functions that it offers to vendors and customers continues to be an attractive risk-reward for portfolios.”

6. Expedia Group, Inc. (NASDAQ:EXPE)

Number of Hedge Fund Holders: 82

Expedia Group, Inc. (NASDAQ:EXPE) is a Seattle-based online travel technology firm, operating travel metasearch engines such as Expedia.com, Hotels.com, Hotwire.com, Orbitz, Travelocity, and CarRentals.com, among others.

Citi analyst Ronald Josey assumed coverage of Expedia Group, Inc. (NASDAQ:EXPE) on April 19 and raised the price target on the shares to $200 from $198. As consumer engagement online continues to increase, the analyst sees multiple factors that will drive sustainable growth in the technology space. He kept a Neutral rating on the stock.

Expedia Group, Inc. (NASDAQ:EXPE)’s revenue for 2021 stood at $8.5 billion, up from $5.1 billion in the preceding year. The company suffered a net loss of $2.6 billion in 2020, but recovered in 2021, posting a net income of $12 million.

Among the hedge funds tracked by Insider Monkey, 82 funds reported owning stakes worth $7.4 billion in Expedia Group, Inc. (NASDAQ:EXPE) at the end of December 2021, compared to 78 funds in the prior quarter, holding stakes in Expedia Group, Inc. (NASDAQ:EXPE) valued at $6.5 billion. Daniel Sundheim’s D1 Capital Partners is the largest shareholder of the company, with a position worth $2.29 billion.

Like Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), elite hedge funds are pouring into Expedia Group, Inc. (NASDAQ:EXPE).

Here is what Heartland Mid Cap Value Fund has to say about Expedia Group, Inc. (NASDAQ:EXPE) in its Q4 2021 investor letter:

“The run-up in equity prices over the past year and a half has narrowed the pool of attractively valued businesses. Economically sensitive areas of the market, in particular, have seen valuations stretched—but the impact of investor exuberance is evident in share prices of companies throughout the broader market. In our view, the elevated valuations commanded by many stocks have heightened risks and dampened upside potential.

In response to this backdrop, we continue to focus on finding and owning companies that are poised to succeed against a variety of backdrops or those that are priced at significant discounts to peers regardless of the sector or industry. Recent addition Expedia Group, Inc. (EXPE) is an example of the type of business we’ve found attractive.”

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Disclosure: None. Analysts Are Increasing Prices Targets of These 10 Tech Stocks is originally published on Insider Monkey.