Goldman Sachs said this week that there are plenty of cheap tech stocks to buy following earnings. As of Friday, 92% of S&P 500 companies had reported quarterly results, with 79% of those reporting better-than-expected earnings, according to FactSet. The information technology sector reported year-over-year earnings growth of 23.2%, according to John Butters, senior earnings analyst at FactSet. CNBC Pro combed through Goldman Sachs research to find the most undervalued tech stocks with buy ratings. These include Microsoft, Teledyne Technologies, Arista Networks, Toast, and AppLovin. Teledyne Technologies Don’t overlook Teledyne stock, Goldman said. The company makes electronic components, including avionics systems for commercial aircraft. He said Goldman supported Teledyne’s stock price even after its disappointing late April earnings report. Analyst Noah Poponak called the company a “long-term cash flow conglomerate” and well-positioned for growth. “Growth will accelerate in the second half of 2024 and be easily comparable through 2025, but margins could widen and there is room for capital deployment,” he said. Poponak said that despite the missed profits, the stock is trading at a value that cannot be ignored. In fact, the stock is down nearly 12% this year. “We intend to take advantage of the rebound and maintain a ‘buy’ rating on the stock,” he said. Microsoft analyst Kash Langan says more upside is in store for the tech giant following its late April earnings report. He said the company’s cloud-based business, Azure, has delivered “profit stability,” and demand for artificial intelligence remains strong, “leaving the company well-positioned to gain share.” said. Gen-AI’s revenue is due to its broad suite of AI services and productivity-centric focus in an efficient manner leveraging playbooks from Azure Build,” Langan added. The stock price is particularly attractive, with an increase of 10% in 2024. “We believe Microsoft is one of the most attractive investment opportunities in the technology industry and across sectors,” analyst Michael Ng said of Arista’s first-quarter earnings report. Early this week. The company said it sees many positive catalysts emerging in the coming months as artificial intelligence begins to gain traction. “Demand trends are improving and the ‘revenue outlook’ is increasing,” Ng said, adding, “Second, ANET is looking to improve its AI position and reach a growth rate of over $750 million in 2025. “We have increased confidence in our AI revenue targets,” he added. Finally, Arista’s guidance seems overdone. Analysts expect Arista to report second-quarter sales in the range of $1.62 billion to $1.65 billion, which is a good thing. He said that it shows. Teledyne Technologies’ stock is up 33% this year, and “short-term cyclical inputs are creating opportunities in this long-term cash flow composite,” Ng said. …Growth will accelerate in the second half of 2024 and then be easily comparable until 2025, while margins are likely to expand and there is room for capital deployment. …We intend to take advantage of the rebound and maintain a Buy rating on the stock. ” Microsoft “Delivers sustained revenue growth and margin stability despite large investment cycles. Through our suite of AI services and productivity-centric focus, we are well-positioned to capture Gen-AI’s revenue share. We believe the company’s confidence in its net growth trajectory…All told, we see TOST as the undisputed leader in next-generation restaurant software, and since its IPO, the main pushback has been against TOST. Arista Networks “First, ANET’s 6-month revenue outlook for revenue acceleration in the second half of the year is driving demand trends for Cloud Titans. While this is a headwind to our gross margin mix, Cloud Titans’ public cloud investments have improved as we’ve balanced our spending, not just AI. , ANET is growing confident in its AI position and its 2025 AI revenue target of > $750 million…as optimism for AI rises.” AppLovin “Looking forward.” Looking ahead, management continues to express confidence in the opportunity to grow ahead of even greater advertiser scale, new ad formats and verticals, and improvements to the underlying AI models – in our view, APP will continue to grow. We reiterate our buy rating on PT and expect new growth opportunities to continue accelerating with several years of above-average growth and strong margins. Increase from $73 to $100.
