TSP Weekly Tech Stock Update—Aug 24, 2024
This Week: WDAY refocuses on profitability, AVGO new customer wins, MNDY/SMAR new 52-week highs, PANW platform progress, SNOW bears in control, CRWD/NTNX earnings previews, Fidelity likes COHR & more.
Hello from Rob…
—In Q2, Invesco, Fidelity and Wellington Management were big buyers of Coherent (COHR, $79.38), a manufacturer of networking components, optical devices and laser systems/subsystems.
During the June quarter, when Coherent shares traded between a low of $48.78 (mid-April) and a high of $75.25 (mid-June), Invesco added 3.201 million shares, boosting its stake by 59% to 8.599 million shares. The firm is a Top 5 holder.
Fidelity moved into the Top 10 holders with its purchase of 1.834 million shares, which lifted its stake by 93% to 3.799 million shares. Wellington Management also became a Top 10 holder, more than doubling its position to 3.772 million shares via the purchase of 1.901 million shares.
Coherent stock has rallied sharply from the August 5 low of $52.14, hitting a high this week of $80.40, just below the 52-week high of $80.93 reached in the middle of July.
Earlier this month, BofA upgraded Coherent to ‘Buy,’ saying it sees improved prospects for the company to double EPS to $4 by FY’26 (June) due to the "surging" AI optical transceiver market, operational improvements and gross margin expansion under new CEO Jim Anderson. The firm has a Coherent price target of $90.
Stifel recently raised its target to $85 from $75 because it continues to view Coherent as well-positioned to benefit from continued AI infrastructure spend. However, Morgan Stanley is more cautious, with an ‘Equal Weight’ rating and price target of $72, noting Coherent operates in highly competitive markets.
—Following up on Rubrik (RBRK, $34.95) from last week’s issue, Piper Sandler on Monday started coverage at ‘Overweight’ with a price target of $42. The firm says Rubrik’s cloud-based data protection and management platform is replacing legacy competitors. Piper thinks Rubrik is capable of sustainable annual revenue growth of 20%. A number of tailwinds—including ransomware, AI and Backup-as-a-Service—are driving shifts to next-generation vendors such as Rubrik, says the firm.
*Inside This Issue: Broadcom Scores More AI ASIC Customer Wins
—Paid subscribers will receive the September 2024 PDF of Tech-Stock Prospector (TSP #271) via email on Tuesday, September 10.
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