Ticker Reports for January 2nd
3 Legacy Tech Companies Reemerging as AI Leaders
Legacy, product-based software technology is quickly becoming obsolete. Not only is the cloud the dominant force in technology today, but AI is also rapidly advancing, altering how software technology is used. Today, we look at three once-powerful legacy software technology companies reemerging as AI powerhouses. They have adapted to the changes and can now benefit from them in the long term, growing and driving shareholder value. With the AI boom expected to last for decades, the opportunity for value gains is significant.
Micron Memory Is Central to AI, NVIDIA GPUs, and Data Centers
Micron (NASDAQ: MU) is a leading memory chipmaker for legacy technologies and is now the AI leader. AI requires lots of memory for training and inference, and the solution is HBM. High bandwidth memory provides the capacity and power needed, and Micron’s HBM3E technology is the best. The HBM3E architecture provides industry-leading capacity and power usage, which is critical for AI function and cost. The more advanced AI becomes, the more power it consumes, increasing operating costs.
Regarding demand, the legacy business continues to weigh on results but is offset by robust growth in the higher-margin data center and AI industries. The company is taking share in those categories, growing its data center business 40% sequentially in Q3, 400% compared to the previous year, and is expecting strength to continue. The forecast is for the HBM market to double sequentially in Q4 and then quadruple in size over the next few years. The estimates for systemwide revenue growth is for it to double within the next two years and sustain record levels for the subsequent three to five years.
The analysts moderated the price target outlook at the end of 2024 but continue to expect a robust gain. The range of targets runs from $98 to $250, with more than 80% of the December targets in the $125 to $145 range bracketing the consensus. Consensus is down from its peak but forecasts a solid 55% upside for the market.
Oracle Follows the Money Into the Cloud: Becomes Database of Choice for Hyperscalers
Oracle (NYSE: ORCL) embarked on a game-changing mission in 2011 when it launched its first cloud products and shifted into overdrive with the advent of its Gen 2 Cloud. Today, Oracle’s subscription-based cloud business has surpassed its legacy product business in terms of its contribution to the net, and its share is growing.
Oracle is not only a budding hyperscaler building some of the most advanced data centers on the planet but also a leading provider of services for AI developers and AI-enhanced data management services. It has partnerships with the three leading hyperscalers, including Google, Amazon, and Microsoft, embedding its tools into their networks, making it the most readily accessible and easy-to-use database on the market.
Results in 2024 include slowing growth, with legacy business offsetting the cloud, but also evidence of mounting leverage. The company’s remaining performance obligation, RPO, was up nearly 50% at the end of CQ3 due to strength in next-gen technologies. This suggests revenue growth will accelerate as the year progresses and remain strong well into 2026 or later. Analysts rate this stock as a Moderate Buy and see it advancing at least 8% from 2024’s closing price. However, the revisions trend is positive, with the consensus up 7% in December and 45% for the year, pointing to a much larger 25% gain at the range’s high end.
Palo Alto Changes With the Times: Secures AI Using AI
Palo Alto Networks (NASDAQ: PANW) is the world’s leading cyber security company, with businesses supported and driven by secular trends, including AI. Not only is AI driving an increase in cyber threats and their severity, but Palo Alto’s ability to detect, prevent, and mitigate those threats.
The critical development for Palo Alto Networks investors is the move to platformization. Unifying its tool into a single, easier-to-use format is critical to retaining existing clients and gaining new ones. Results from 2024 reveal that the near-term impact of the plan on revenue and earnings growth was less than feared, and the potential for gains was more than forecasted. Analysts rate this stock as a Moderate Buy and see it rising 10% at MarketBeat’s reported consensus and another 20% at the high-end range.
Is Starlink Set For The Largest IPO In History?
He turned PayPal from a tiny, off-the-radar startup… to a massive $64 billion giant.
Then, he did it again with Tesla… which is up more than 19,500% since 2010.
For perspective, that turns $100 invested into almost $20,000!
Analysts' Favorite Cybersecurity Stocks: 3 Top Picks
Cybersecurity is a hot topic with the pace of attacks growing, the costs multiplying, and opportunities abundant for cybersecurity companies. Estimated to triple by 2027, the cybersecurity market will top $10.50 trillion, with much spending concentrated on a few names. Leading providers like Palo Alto Networks (NASDAQ: PANW), CrowdStrike (NASDAQ: CRWD), and Fortinet (NASDAQ: FTNT) will be among the winners and are getting the attention of analysts today. These stocks are among the most loved by analysts, ranking in the top 15 Most Upgraded Stocks for 2025 and the three most upgraded in their industry. With cyber threats expected to accelerate, trends supporting their business and analysts' sentiment will continue to drive higher stock prices.
Palo Alto Networks Is the Leading Cybersecurity Provider
Palo Alto Networks is the largest cybersecurity provider in terms of market cap and revenue. It is in the process of platformization, unifying its products into a single, easier-to-use format and producing results faster than anticipated. Neither revenue nor earnings growth were impacted as much as feared, and leverage is building, including increased client count and deepening service penetration, to help sustain above-forecast growth in 2025.
Regarding the analysts, Palo Alto Networks garnered 82 positive mentions in 2024, including upgrades and price target revisions. The 43 analysts tracked by MarketBeat rate the stock with a consensus of Moderate Buy and see it trading at a new high in 2025. The consensus target aligns with the current high, but the revision trend is positive and leads to the high-end range of nearly $240, a gain of 22% from 2024’s closing price.
Palo Alto’s valuation is a concern, but the growth outlook offsets it. The stock trades at 50x next year’s earnings, but earnings are expected to sustain a mid-teen CAGR for at least two years. The long-term forecast is for earnings growth to accelerate near the end of this decade and sustain the higher pace well into the next, bringing the valuation down into the more reasonable low-20x range.
CrowdStrike’s Centralized Falcon Platform Gives It an Advantage
CrowdStrike is less than half the size of Palo Alto Network but is quickly growing its business. In F2025, the growth pace is slowing sequentially and year over year but sustaining a high 30% pace. Growth is expected to continue in F2026 in the 20% range. F2025 results also include outperformance driven by large client growth and service penetration. Clients can use CRWD cybersecurity modules plug-and-play, quickly building upon the base services as needed.
Among CrowdStrike’s advantages is the cloud-native Falcon platform, which centralized its offerings from the start. Falcon allows for fast and easy deployment, provides superior performance, and has a low impact on end-point devices. While not technically a zero-trust service, its services align with the zero-trust framework, making CrowdStrike an integral part of a comprehensive, enterprise-quality, zero-trust solution.
Regarding analysts, MarketBeat tracks 43 analysts who issued 82 positive mentions for the stock in 2024. CrowdStrike is ranked in 8th position overall and second for Most Upgraded cybersecurity Stocks. The analysts peg it as a Moderate Buy and see it trading in the $365 to $450 region in 2025.
Fortinet’s Zero-Trust Offerings Are Easy to Use and Cost-Effective
Fortinet is among the top five cybersecurity stocks by market cap and revenue, growing at a low-double-digit pace in F2024. Results are underpinned by client growth and service penetration and are better than analysts' forecasts. Growth is expected to accelerate incrementally in F2025 and continue to drive superior profitability. Among Fortinet’s attractions is its industry-leading profitability. It is the third Most Upgraded Cybersecurity Stock of 2024.
Fortinet’s CQ3 2024 GAAP and adjusted operating margins are more than double its competitors, driving substantial cash and free cash flow. At the end of Q3, the balance sheet highlights include a cash build and increased current and total assets partially offset by increased liability. The company carries debt but is net cash, leverage is low, and equity is rising. Equity, a measure of shareholder value, turned positive during the quarter and is expected to grow in 2025.
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Analysts Are Bullish: 3 Tech Giants With Upgraded Price Targets
The stock market softened as 2024 ended, with equities retreating amid a more cautious Federal Reserve and lingering inflation concerns. However, while some investors are hesitating, others see this dip as a chance to buy strong stocks at attractive prices.
An easy way to find opportunities? Watch where analysts are raising their price targets, as this is signaling growing confidence in a company’s potential to deliver outsized returns. In the tech space, three names stand out in particular: Meta Platforms, Amazon, and Alphabet. Each has recently received notable price target boosts in recent weeks, reflecting expectations of a strong start to 2025.
If you’re ready to look beyond the short-term noise and set your portfolio up for success, these tech leaders deserve your attention. Let’s jump in and take a closer look at why.
Why Analysts Are Still Bullish on Meta Stock
Meta Platforms (NASDAQ: META) Though they sold off into the new year, shares of social media king Meta were tagging all-time highs as recently as the middle of last month. Overall, 2024 was a stellar year for them, with gains of more than 70%, making them a standout performer.
However, for those who were concerned that they may have missed the boat, their 8% drop over the past fortnight could be a welcome sight. It’s put Meta shares back trading at a strong line of support, and they’ve had several analysts in recent weeks calling for a return to further gains in the near term.
Take JPMorgan Chase, for example. In the week before Christmas, it reiterated its Overweight rating on the stock while boosting its price target to $725. From the $585 that Meta shares were set to start 2025 at, that’s pointing to a targeted upside of nearly 25%.
Amazon’s Impressive 180% Gain in 2024
Amazon.com Inc (NASDAQ: AMZN) Shares of e-commerce and cloud computing giant Amazon had a similar year to Meta. Coming into the middle of last month, they had logged more than 180% gains for 2024 alone before they, too, softened into the final few days of the year.
However, the likes of UBS Group, JMP Securities, and Tigress Financial, to name but a few, have all been reiterating their Buy ratings on Amazon shares in the past fortnight. Tigress, in particular, sees this dip as little more than some short-term profit-taking that’s coming off the back of a slightly more cautious market after the Fed’s update.
Their $290 price target, increased from $245, speaks volumes and points to a targeted upside of more than 30% from where Amazon shares closed on New Year’s Eve.
Bank of America and JPMorgan Back Alphabet as a Buy
Alphabet Inc (NASDAQ: GOOGL) It will come as no surprise that the final tech titan on our list also logged a super-strong 2024. Shares of Alphabet tagged an all-time high in December as part of a rally that saw them gain more than 135% at one point.
While it will have been frustrating for investors to watch them give up some gains ahead of the start of the new year, for those of us on the sidelines, it could be the entry opportunity we’ve been waiting for. Just last week, the team at Bank of America was reiterating their Buying rating on Alphabet shares, as was JPMorgan & Chase, who also boosted their price target up to $232.
This is close to a street-high and bodes well for Alphabet’s prospects heading into the new year. Considering they closed out 2024 just under the $190 mark, JPMorgan & Chase’s new price target would see them gain more than 20% in the coming weeks.
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