Analysts
at
Goldman
Sachs
have
highlighted
a
handful
of
tech
stocks
with
upside
as
earnings
season
begins
to
wind
down.
The
S
&
P
500
tech
sector
posted
an
earnings
growth
rate
of
21.6%
in
the
fourth
quarter.
That
compares
to
an
overall
expansion
in
S
&
P
500
earnings
of
9.5%
last
quarter,
according
to
LSEG,
formerly
known
as
Refinitiv.
CNBC
Pro
combed
through
top
Goldman
Sachs
research
to
find
the
firm’s
best
ideas
in
tech.
The
names
below
are
all
rated
buy.
They
include
Arista
Networks,
Arm
Holdings,
Monday.com
,
AppLovin
and
ASML
Holding.
Arm
Analyst
Toshiya
Hari
is
standing
by
shares
of
the
semiconductor
and
software
design
company.
Arm
delivered
a
blowout
fiscal
third-quarter
earnings
report
earlier
this
month,
and
the
sky
is
the
limit
for
the
company,
according
to
the
firm.
Indeed,
shares
are
up
a
whopping
70%
in
2024.
Hari
said
he
expects
Arm
to
“extend
its
reach
across
applications
to
which
it
is
under-indexed
today
including
Data
Center,
Automotive,
and
[Internet
of
Things].”
The
firm
is
especially
bullish
on
Arm’s
data
center
business,
which
boasts
customers
from
the
likes
of
powerhouse
companies
such
as
Microsoft,
Nvidia
and
Amazon.
Arm
also
has
a
“robust
margin
profile,”
the
firm
said.
Meanwhile,
there’s
more
upside
ahead
for
the
company’s
shares,
Hari
added.
“Looking
ahead,
as
we
indicated
in
our
initiation
report,
we
expect
Arm
to
exhibit
strong
operating
leverage
over
the
medium-
to
long-term
while
investing
appropriately
to
address
its
expanding
[total
addressable
market],”
the
analyst
said.
Monday.com
The
project
management
software
company
is
firing
on
all
cylinders,
according
to
analyst
Kash
Rangan.
“Monday.com
reported
solid
4Q23
results
across
all
metrics
while
setting
more
modest
2024
revenue
and
operating
margin
guidance,”
the
analyst
said
after
the
company’s
quarterly
report.
But
despite
the
conservative
guidance,
Rangan
said
he’s
standing
by
the
stock
with
a
slew
of
untapped
growth
opportunities
on
deck.
In
particular,
the
analyst
said
Monday.com
is
well-positioned
to
expand
its
business
reach
in
divisions
such
as
finance,
marketing
and
human
resources.
“As
the
macro
environment
begins
to
improve,
Monday
may
also
see
more
organic
expansion,
driving
benefits
to
its
sales
efforts,”
he
added.
Shares
are
up
about
20%
in
2024.
“With
strong
topline
growth,
shift
to
the
enterprise
market,
large
under
penetrated
TAM
and
strong
competitive
moat,
Monday.com
has
ample
runway
for
growth
in
our
view,”
he
said.
ASML
The
semiconductor
company
posted
beats
on
its
latest
earnings
report
,
but
warned
that
it
expects
sales
to
be
flat
this
year
compared
to
2023.
Nevertheless,
shares
are
up
about
23%
this
year,
and
analyst
Alexander
Duval
thinks
additional
gains
will
follow.
The
“commentary
since
[the]
4Q23
results
further
reinforces
our
confidence
in
a
near-term
inflection
and
[a]
robust
2025
ramp,”
he
wrote
recently.
Orders
and
demand
remain
robust,
and
geopolitical
risk
is
low
as
the
company’s
exposure
to
China
is
rather
minimal,
the
firm
said.
Further,
Duval
said
ASML
has
a
“deep
competitive
moat”
in
its
extreme
ultraviolet
lithography
technology,
also
known
as
EUV
,
which
it
uses
to
make
microchips
.
Duval
acknowledged
that
shares
of
ASML
have
lagged
some
of
its
semiconductor
peers,
but
he
said
that
just
leaves
more
room
for
upside.
The
stock
also
sits
on
the
firm’s
prestigious
conviction
buy
list.
“While
the
stock
has
outperformed
global
semicap
peers
since
4Q23
results,
we
believe
that
the
current
stock
price
and
valuation
still
do
not
reflect
ASML’s
stronger
growth
story,”
he
added.
Arista
Networks
“Beat
and
reiterate
2024
guidance
against
elevated
expectations
for
AI
winner.
…
As
the
leading
branded
provider
of
switches
to
US
hyperscalers,
ANET
is
well
positioned
to
capitalize
on
the
ongoing
growth
in
data,
the
continued
digital
transformation
driving
workloads
from
on-premise
to
public
and
hybrid-cloud,
and
the
growing
demand
for
higher
bandwidth,
faster
speed,
and
lower
latency.”
Arm
“Consistent
with
our
thesis
at
the
time
of
our
initiation,
we
expect
Arm
to
not
only
grow
dollar
content
in
smartphones,
primarily
through
higher
royalty
rates,
but
to
also
extend
its
reach
across
applications
to
which
it
is
under-indexed
today
including
Data
Center,
Automotive
&
IoT.
…
Looking
ahead,
as
we
indicated
in
our
initiation
report,
we
expect
Arm
to
exhibit
strong
operating
leverage
over
the
medium-
to
long-term
while
investing
appropriately
to
address
its
expanding
TAM.”
Monday.com
“MNDY
reported
solid
4Q23
results
across
all
metrics
while
setting
more
modest
2024
revenue
and
operating
margin
guidance
…
As
the
macro
environment
begins
to
improve,
Monday
may
also
see
more
organic
expansion,
driving
benefits
to
its
sales
efforts.
…
With
strong
topline
growth,
shift
to
the
enterprise
market,
large
under
penetrated
TAM
and
strong
competitive
moat,
Monday.com
has
ample
runway
for
growth
in
our
view.”
ASML
“While
stock
is
up
+19%
since
its
earnings
we
highlight
that
the
stock
has
still
lagged
its
semicap
peers
in
the
last
12M,
suggesting
scope
for
further
upside
in
our
view.
…
We
continue
to
believe
that
the
current
valuation
does
not
fully
capture
the
improved
near-term
visibility
&
improvement
in
AI
demand
dynamics
across
different
end
markets,
materially
higher
growth
opport.
in
2025
&
beyond,
as
well
as
ASML’s
deep
competitive
moat
in
EUV
technology
…
Commentary
since
4Q23
results
further
reinforces
our
confidence
in
a
near-term
inflection
&
robust
2025
ramp.”
AppLovin
“We
recap
APP’s
Q4’23
earnings
report,
which
continued
a
trend
that
started
in
early
2023
with
operating
momentum
in
its
Software
business
and
outsized
incremental
Adj
EBITDA
margins
on
its
scaling
revenue
base.
… In
our
view,
we
continue
to
look
long-term
at
the
collection
of
businesses
under
AppLovin
as
producing
above
average
industry
growth
and
a
strong
margin
profile
in
a
normalized
mobile
ads/mobile
gaming
landscape.”
