Secular Tailwinds Are Driving These Stocks To New Highs
Secular tailwinds are driving the entire tech sector to new highs. It doesn't matter where you look, but rising demand and low inventories are bringing on a new age for the entire industry. Simply starting with shortages in the chips sector, the ramp in production will provide an opportunity for tech companies to improve and enhance their offerings in ways downstream companies can capitalize on.
1. Nvidia Moves Higher On A Wave Of Analyst Upgrades
Nvidia Corporation (NASDAQ:NVDA) has been a fairly high-profile stock all year, if not for the last decade, simply because of the global microchip shortage. The company has received 13 call-outs from the analyst community over the last 6 weeks, all of them bullish, and all including an upgrade or an increase to the price Target.
The consensus at the moment is near $674 which implies a bit of downside compared to current price action, but the trend in sentiment is decidedly bullish. The most recent analyst nods have the stock trading upwards of $800 with the two most recent setting the Wall Street high.
Both Bank of America and Raymond James have Nvidia pegged at $900. This implies a 20% upside to the stock that we think is more than reachable. The technicals alone support such a move. Raymond James’ price target increase included a rating upgrade to Strong Buy from Outperform and an expectation for data center improvement.
Analyst Chris Caso sees the data centers recovering due to a resumption of enterprise activity coupled with the increasing use of digital assets by global businesses. As for the core business, Caso doesn't see any credible threat to Nvidia’s AI dominance and neither do we.
Nvidia is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.
2. ChargePoint Is Electrifying The EV Industry
Start-up ChargePoint Holdings (NYSE:CHPT) is quickly becoming the leader in EV charging stations and solutions for both OEMs and consumers.
The company announced two new deals recently that have the already-bullish analysts’ community buzzing even louder. The deals include a partnership with Mercedes-Benz called “me Charge” that provides Mercedes EV drivers access to a frictionless cross-platform charging experience.
The second is a portfolio of solutions for fleet-charging needs globally. Based on the assumption that the EV market is going to grow at a 40% to 50% CAGR over the next couple of decades and reach upwards of 50% of the global auto fleet, we view these as very constructive moves and are not surprised to hear the analyst chiming in.
Needham initiated coverage on ChargePoint Holdings with a Buy, viewing the company as poised for strong growth. They point out the firm's early mover advantage, capital-light business model, superior offerings, and management team. Jefferies also initiated coverage with a Buy rating calling the firm the leader in U.S. charging infrastructure and pointing out a clear path to profitability by 2024.
The consensus rating for ChargePoint is a Buy with a price target near $36. That assumes a low double-digit upside while the high price target of $46 implies roughly 33% of upside.
3. Crowdstrike Is Securing The Cloud
Cloud and cloud security are two of multiple hot trends within the tech and internet space and Crowdstrike Holdings (NASDAQ:CRWD) is a leader within the industry.
Stifel just upgraded the stock to Buy from Hold, and raised the price target to $300 from $240 following the results of a proprietary survey. The firm surveyed 51 Crowdstrike customers and the feedback was very positive.
According to the press release, the results showed increasing demand not only for Crowdstrike’s core solutions, but also demand for non-traditional workloads. We read that to mean work-from-home and other remote-work cloud-based solutions. Stifel’s $300 price target is the Wall Street high and assumes about a 20% upside in this stock.
