The type of genius developers who expanded the use, connectivity and ubiquity of the Internet are now needed for the full-scale development of the Internet of Things. In a few short years, consumers will see almost every practical use for almost any task aided and guided through the Internet. In a new research report, the wireless equipment analysts at Deutsche Bank stress that many new platforms and applications, and in some cases collaborations, will be needed to guide the new breakthrough technology, and only the top firms are prepared to deliver products that will make the Internet of Things fully functional.
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Here are the top tech stocks to buy at Deutsche Bank that may be destined to dominate the field.
Ciena Corp. (CIEN) is a company that many analysts, including the Deutsche Bank team, believe could be the top beneficiary of the increase in wireless spending. The company is rapidly reducing its losses, and the earnings growth outlook for the next five years is also quite promising. According to Yahoo! Finance, investors can expect Ciena's earnings to improve at an annual rate of 16.7% for the next five years. The Deutsche Bank price target for the stock is $30. The Thomson/First Call estimate stands at $27.80. Ciena closed Tuesday at $20.48 a share.
CommScope Holding Co. Inc. (COMM) provides connectivity and infrastructure solutions for wireless, business enterprise and residential broadband networks in the United States, Europe, the Middle East, Africa, the Asia Pacific, Central and Latin America, and Canada. The company operates in three segments: Wireless, Enterprise and Broadband. The company came public as a very successful 2013 IPO, and it has rallied recently after selling off after the deal. The Deutsche Bank price target is $30, and the consensus target is $30.46. The stock closed Tuesday at $26.49.
Cisco Systems Inc. (CSCO) was just raised to Buy from Hold at Deutsche Bank, as yet another major firm upgrades the stock following the first solid earnings report in more than a year. The Deutsche Bank team cited several positive catalysts in the pipeline for Cisco in their upgrade, and the stock is still providing investors a good entry point. Shareholders are paid a solid 3.1% dividend. The Deutsche Bank price target goes from $25 to $30. The consensus target for the networking giant is $25.43. Cisco closed Tuesday at $24.71.
F5 Networks Inc. (FFIV) has started to gain some traction over the past month, and a pullback that started in March has provided a better entry point for investors. The company provides solutions for an application-based world. The company helps organizations seamlessly scale cloud, data center and software defined networking (SDN) deployments to successfully deliver applications to anyone, anywhere, at any time. F5 solutions broaden the reach of information technology (IT) through an open, extensible framework and a rich partner ecosystem of leading technology and data center orchestration vendors. This approach lets customers pursue the infrastructure model that best fits their needs over time. The Deutsche Bank price target is $135, and the consensus target is $120.97. Shares ended Tuesday at $109.68.
Infoblox Inc. (BLOX) is another top stock in the Deutsche Bank report, but is not classified as old value tech. The company delivers automated network control solutions, the fundamental technology that connects end users, devices and networks. These solutions enable approximately 7,100 enterprises and service providers to transform, secure and scale complex networks. The Deutsche Bank price target is $30, and the consensus is at $27.38. Infoblox closed Tuesday at $20.58.
Qualcomm Inc. (QCOM) remains the 900-pound gorilla in the wireless space, despite its recent earnings miss. The company expects 6% growth in developed markets, with shipments at 443 million. Qualcomm's Systems on a Chip (SoCs) will go into 1.22 billion to 1.3 billion devices this year. This represents a consolidated growth rate of 13% to 20%. Because Qualcomm operates at such economies of scale, the company has a lot of flexibility when it comes to pricing. That means it can produce margin gains better than many competitors. Investors are paid a 2.1% dividend. Deutsche Bank target price is $86. The consensus target is $84.96. Qualcomm closed Tuesday at $80.46.
While things like the driverless car and other incredible breakthroughs are a ways down the road, it is clear that in the race to the technology top, the big companies have the deep pockets to fund massive change. Like the Deutsche Bank report states, a new breed of developers is required to provide programs and applications that work on the infrastructure platforms and products provided by these top names. One thing is for sure, the future will be amazing.