Goldman Sachs is bullish on technology ahead of important earnings. The company listed a number of stocks that investors should buy ahead of the quarterly results. CNBC Pro combed through Goldman Sachs' research to find the company's favorite technology names as earnings season heats up. These include Apple, Fiverr, Microsoft, and Broadcom. Microsoft analyst Kash Rangan expects big things from Microsoft when the company releases its second-quarter report on Tuesday. The company said it expects many upturns in the future as it ramps up its efforts in artificial intelligence. “In particular, we note a healthy growth profile for commercial M365 excluding Gen-AI, an improving outlook for PC, and a reduced impact of the optimization narrative that took hold in CY23,” Langan said. . Microsoft 365 is the company's portfolio of software products. Additionally, Microsoft's cloud computing platform, Azure, has great AI potential, Langan said. Azure is on track to become a $200 billion business by 2029, he added. Langan also sees “a healthier backdrop giving way to broader revenue reacceleration and earnings revisions, which could support Microsoft's current valuation.” The company's stock price has risen more than 7% this year. “We believe Microsoft is one of the most attractive investment opportunities in the technology industry and across sectors,” Langan said. Broadcom Goldman recently resumed coverage of the semiconductor company with a buy rating ahead of its February earnings report. The company said there will be no shortage of positive catalysts for Broadcom after the VMware acquisition. “In short, we can expect double-digit sales growth in our AI-related businesses,” analyst Toshiya Hari wrote. Additionally, he said the partnership with VMware should “deliver operating margin expansion and profit growth well above the industry average.” Broadcom is well-positioned to capture synergies with the transaction, which will drive “above-average EPS growth,” Hari added. The analyst is also bullish on Broadcom's non-AI semiconductors, saying they are poised for a “cyclical recovery.” “We also expect the company's attractive return on capital to provide tailwinds to the stock's relative performance,” Hari said. Meanwhile, Broadcom shares have risen about 8% since the beginning of the year, but analysts say the stock still has room to rise. Apple Goldman analyst Michael Ng backs the tech giant's stock. The company named Apple as its top choice for 2024 and its favorite idea heading into its February 1 earnings call. In particular, Ng said there is room for upside in revenue growth for his Apple services, including Apple TV+, App Store and Apple Music, even if the macro environment facing consumers becomes more challenging. is thinking. According to Ng, Apple's track record of product innovation should also continue as the iPhone cycle begins again, with new devices like the Apple Vision Pro. The stock, which Ng calls a “high-quality” compounder, is on Goldman's prestigious conviction buy list. The analyst noted that Apple outperformed the market in 2023, ending the year with a stock price of about 48.2%. By comparison, the S&P 500 index rose 24.2% during the same period. Apple is expected to remain flat in 2024, but Ng believes it will continue to rise. “Apple should also benefit from the industry's track record of recovering PC demand and increasing market share,” he said. Microsoft “specifically points to a healthy growth profile for commercial M365 excluding Gen-AI, an improving outlook for PC, and a reduced impact of the optimization narrative that took hold in CY23. We see MSFT as one of the most attractive investments in the technology industry and across all sectors. “In short, strong double-digit revenue growth in our AI-related businesses, a cyclical recovery in Broadcom's traditional semiconductor business, and the VMware acquisition,” Broadcom said. We expect subsequent synergies to significantly outperform operating margin expansion and earnings growth.'' …We also expect the company's attractive return on capital to provide a tailwind to the stock's relative performance. It is assumed. ” Apple “2023 was a stock-picking year for IT hardware and networking equipment with high intragroup diversification.… AI and high-quality formulators outperformed.… Apple is the industry leader. It should also benefit from a recovery in PC demand and performance.'' AAPL outperformed the market year-to-date in 2023. ” Fiverr “Longer term, we believe FVRR is building operating momentum as a two-sided market business with ample runway for normalized growth across several key themes. 1) Managing and evolving large and growing TAMs as the future of work, 2) Continuing to grow both the freelancer and buyer sides of the market, and 3) Driving recruitment, retention, and share of wallet. product innovation as, and 4) geographic expansion.
