Wall Street is the main reference for stocks global. No news yet. The advantage of being listed on the US stock exchange translates into greater visibility and access to one of the most active and attractive markets for investors. This concentrates the world’s major capital companies in a single space and is particularly relevant in the case of technology companies: the companies that have served as a catalyst for the recent increases. In addition, it allows the investor to buy these international securities in a single currency, the dollar (mainly through American depositary receipts, ADRs), although not all of them are. Wall Street-listed technology companies bear the stamp of made in the usa.
Analytics firms look beyond the magnificent seven when selecting the best buying opportunities in the technology sector. Even though companies like Apple, Amazon, Alphabet or Nvidia They are present in a good part of the investment portfolios, in the European stock market and in the Asian market, there are also securities with the buy sign that can be purchased without needing to know the currency market beyond the euro and the dollar.
Among the nine technology companies with the Best Buy recommendation according to the market consensus collected by FactSet filtered by a large market cap and upside potentialEuropean and Asian stocks stand out. These nine companies are Amazon, Marvell, Nvidia, Sopra Steria, Infinion, Prosus, Samsung, Taiwan Semiconductor and Sony. In fact, on average, European countries have a greater lead than the three American or Asian countries.
Technology in the United States
It is true that the seal made in the usa In the technology field, it is synonymous with quality and confidence in the stock market, even despite the fears that have invaded the market due to a new bubble with Artificial Intelligence. And for experts, this is even more true if it is those that are most capitalized, not only on the American stock market, but also in the world. Amazon, Nvidia and Marvell Technology obtain the best buy recommendations of the entire Nasdaq 100 and They combine an average increase potential of 26%. This is lower than that of European and American companies, but the stock market growth that this trio accumulates in 2024 will not be achieved by technology companies from other continents.
The company chaired by Jeff Bezos has reached all-time highs in the stock market this year, although summer volatility has led to its share price currently sitting just over 13% below that all-time high. However, these falls have only improve purchasing opportunities that experts have already seen in their actions. For them, they estimate a strong potential increase for the following months, of 29%, which would be added to the 12% of gains that their shares accumulate in 2024.
On the operational front, experts also expect joy in the annual accounts of the American company, for which they predict a 66% higher net profit this year alone compared to 2023, in particular powered by its cloud services businessAWS (Amazon Web Services). Over the next three years, profits will continue to increase by another 58%.
Semiconductors are the real winners of this new technological revolution. It is thus understandable that of this trio, two companies belong to this sector. And although Nvidia is the undisputed star, when it comes to buying stocks, the Experts prefer to get Marvell Technology titles (one of the values of Tressis Eco30 Walletthe investment fund of elEconomista.es). The American company has gained more than 13% on the stock market this year and analysts still estimate a 32% upward trend for it. But not only does its stock market performance offer promising prospects, but on the operational level, experts predict a profit growth of 135% over three years.
This week is the 2023 star stock, Nvidia, presented the results corresponding to the second quarter of its financial year and, although the figures once again exceeded the high expectations of the experts, the market again made a rather negative reading, recording a growth lower than that of the same period of the previous year.
But even though investors may doubt Nvidia’s resilience in the short term, experts remain confident in the semiconductor company’s ability to generate value in the stock market and therefore continue to recommend buying the company’s shares. Only from 2023, the The chipmaker appreciated by 700%137% this year alone, once again being the most optimistic company in the North American market. And, even after rising in these months to become the most valuable company in the world, analysts still see growth potential for its price of 16%.
European technology
Investors are not buying European technology with the same euphoria as American technology, but that does not mean that investment opportunities in technology from the Old Continent are not available. are on par with Wall Street. In fact, the potential offered by the continent’s top three recommendations exceeds that of the United States and Asia.
In first place on the European podium is Sopra Steria, with the best buy recommendation, according to FactSet, with the greatest lead distance on the stock market and also with the lowest PER (times in which the profit is reflected in the share price). This multiplier, less than 10, places the digital consulting and software publishing company as the cheapest compared to its European peers and the rest of the selection of technology companies in the world. with the accounts updated mid-2024and thanks to the dynamics of Supra’s business supported by digital transformation with AI, the company confirmed its forecast for the rest of the year in which it expects revenue growth of between 2% and 3% with an operating margin “close to 10%”.
Infineon Technologies, one of the largest semiconductor companies in Europe, after the Dutch ASML and ASM, is also suffering from red figures this year. Its stock market punishment is mainly due to the pressure on margins that They are suffering in their business in Chinaas well as the dispute with Qimonda, a German company formed from a spin-off of Infineon in 2006, which resulted in an agreement under which Infineon will pay the group just over 750 million euros.
All this has led the price of the German company to double-digit losses in 2024, although experts point to the recovery of its price for which They estimate a potential increase of 30%. in anticipation of the coming months. Over a three-year period, experts expect its net profit to increase by around 50%.
Prosus Not only can it boast of having one of the best buy recommendations in the technology sector of the Old Continent, but also of being one of the best tips of the EuroStoxx 50, more precisely the second, after Deutsche Telekom. This Dutch company that provides services related to the Internet can also boast of being the only one in this selection of European companies. record stock market increases of more than 20% and still show a strong upward trend for the following months, i.e. 31%. Over the next three years, experts expect its net profits to increase by more than 20%.
Asian Technology
There is technology beyond China, although many Asian companies are focusing on this market either to produce their equipment or in search of their consumers. The Japanese, Korean and Taiwanese stock markets are also characterized by the concentration of securities related to the production of material or the development of software. Companies like Samsung, TSMC (Taiwan Semiconductor) or Sony can currently use Nvidia products to update their AI development, but they aspire to compete in the same race as the American company worth billions of dollars.
Samsung has the longest lead of the three experts selected among the major Asian tech companies and also the best buy recommendations, according to the expert consensus collected by FactSet. Up to the target price of 110,000 Korean won ($82.15 at the U.S. ADR exchange rate), the company has a lead of nearly 50%. The Korean company, I have seen how The international market demands that its chips continue to implement artificial intelligence. Even Nvidia itself is interested in its HBM 3 and HBM3e components for its AI processors. In this sense, Cecilia Chan, an analyst at Bloomberg, expects these purchases to increase in the second half of 2024, to the benefit of the Korean company.
And Samsung has fallen behind its main rival on the Seoul Stock Exchange, SK Hynx, and is now starting to narrow its gap in semiconductor production. “The good performance of its chip business in the second half of 2024 should help eliminate the concerns about weak margins“, commented Caleb Kim, analyst at Shinhan Securities. While it is true that the Korean company is listed with a P/E of 12.5 times, the cheapest compared to the other two Asian companies, it is not the company that will increase its net profit the most over the next three years, since until 2026 it will grow by 46% compared to the 53% expected from the Taiwanese company.
Taiwan Semiconductor (TSMC) is the other major semiconductor maker in the world that has not disappointed the consensus of experts reported by Bloomberg in its quarterly earnings per share results for years. The company is the leading benchmark on the Taipei Stock Exchange in terms of market capitalization, although it is listed at a premium to Samsung or Sony. The company’s only handicap is that it may be one of the main victims of a US-China trade war because Taiwan Semiconductors has a greater exposure to the Asian giant’s revenue than Korean technology. Overall, JP Morgan believes the company will “maintain growth while rebuilding inventory levels over the next twelve months,” according to the investment bank’s analyst, Gokul Hariharan. The consensus among experts is that to the 60% that TSMC is increasing in 2024, it can still add another 32% over the next twelve months.
Sony, the Japanese technology company, is lagging in key earnings growth indicators and even in potential, as it offers a stock market lead of less than 20% while the expected profit increase until its 2026 fiscal year (the fiscal year in Japan starting in April) would be 14%, according to the market consensus. However, it is the best option among Japanese technology companies and has a buy recommendation. Sony was among those Japanese companies that He collapsed on August 5thwhen the Nikkei 225 records second worst session in history following the change of strategy to trade with the yen. However, experts’ assessments have not been affected during this period as on average the price target remains at 16,550 yen, which at the exchange rate would imply a price of $113.8.
