TSP Weekly Tech Stock Update—Jan 6, 2024
This Week: More Amazon bulls, Apple shares under pressure, 2 cybersecurity stocks in the spotlight, Confluent's growth drivers, Monday looks well-positioned, KeyBanc likes Workday, ANSS update & more.
Hello from Rob…
—Amazon (AMZN, $145.24) continues to get positive attention on Wall Street. Mizuho raised its price target to $220 from $180, saying investors are not fully appreciating the bullish story, especially related to AWS. The firm expects an improvement in AWS this year, powered by a combination of cost optimizations winding down and a faster pace of deal flow.
Amazon remains a Top Pick in the internet sector at Wedbush. The firm thinks Amazon is particularly well-positioned for 2024 as retail margins continue to rise, advertising revenue continues to materially outperform the broader digital ad industry and AWS reaccelerates against easing comps. Wedbush has a price target of $210.
DA Davidson raised its Amazon target to $195 from $157, saying a growth re-acceleration in AWS could help drive the stock higher this year.
RBC Capital added Amazon to its Q1 Top 30 Global Ideas list, calling out the company’s unmatched scale in e-commerce and its generative AI opportunity. The firm has a price target of $180.
Amazon stock this week pulled back to test the 50-day moving average at $144.64, hitting an intraday low of $144.05 on Thursday. The shares are off 6.7% from the 52-week high of $155.63 reached on December 20.
—UPDATE on Ansys (ANSS, $344.08) buyout speculation. The WSJ on Friday reported that Synopsys (SNPS, $484.81; Mkt cap: $73.6 billion) and Ansys are in “exclusive negotiations” regarding a potential stock-and-cash deal worth around $35 billion, or about $400 a share. Also on Friday, Bloomberg reported that Synopsys is in advanced talks to acquire Ansys for around $35 billion. As of Friday, Ansys had a market cap of nearly $30 billion. Despite ongoing deal chatter, Ansys shares this week were actually down 5.2%.
The stock portion of a potential SNPS-for-ANSS deal could be a sticking point. Synopsys shareholders really don’t seem to like the idea of this particular transaction. Synopsys shares on Friday fell for the ninth session in a row and are off 15.5% from the all-time high of $573.77 reached in the middle of December. Of course, talks could break down and no deal is guaranteed.
*Inside This Issue: 2 Top Enterprise AI Plays for 2024
—Paid subscribers will receive the January 2024 PDF of Tech-Stock Prospector (TSP #263) via email on Tuesday, January 9.
—Paid subscribers have access to the TSP Market Overview and TSP Portfolio Updates sections inside this issue.