The “Magnificent Seven”, who were the top performers in 2018, are not positioned to be telecast again in 2025, according to a Piper Sandler analyst.
Except for Meta Platforms Inc., none has outperformed S&P 500 year-to date. Four of these mega-cap tech shares are actually in the negative.
The firm’s senior analyst Michael Kantrowitz suggests that the “Magnificent 7” should be abandoned in 2025.
He has a list instead of other large-cap technology stocks that he believes will outperform in this year.
Qualcomm and Fortinet are at the top of his list.
Qualcomm Inc. (NASDAQ: QCOM).
Qualcomm stock has already outperformed the benchmark index, with a 15% gain year-to date.
Piper Sandler analyst says it’s still not too late to buy QCOM. Kantrowitz believes that the semiconductor giant will continue to grow through 2025.
His optimism is partly based on Qualcomm’s recent earnings report.
The multinational exceeded Street estimates in both the top and bottom line of its recently completed quarter due to strong smartphone demand.
The company also provided stronger-than-expected guidance for its first quarter, projecting revenue of $10.6 billion and earnings of $2.80 per share.
The revenue of $10.34 billion and earnings per share of $2.69 exceeded analyst expectations.
Piper Sandler also sees Qualcomm as a great AI investment. Statista predicts that the artificial intelligence market will grow at a rate of over 27% annually through the end of the decade.
QCOM shares are currently paying a dividend yield 1.94%, which makes them even more attractive.
Fortinet Inc. (NASDAQ: FTNT).
Fortinet, a cybersecurity company based in California, is another top choice that Piper Sandler believes is a better choice than “Magnificent Seven”.
Kantrowitz says that the shares of the company have already risen by more than 20% in this year, which is more than the S&P 500 Index. They are expected to continue to rise over the next few months.
Analysts are bullish on FTNT, as it is a leader in the Unified Secure Access Service Edge market (SASE) as well as Security Operations.
Investors and customers alike are pleased with its strategy of investing in areas of high growth and strengthening its position within secure networking.
The Nasdaq-listed company reported better than expected results for its Q4 fiscal quarter last week.
Fortinet’s revenue guidance ranged from $6.65 billion up to $6.85billion, exceeding analyst expectations of $6.62billion.
Piper Sandler has a current price target of $135 on FTNT’s shares, which indicates a potential 20% increase from current levels.
Fortinet does not pay a dividend at the moment. It’s not the best investment for income investors.
This post Top 2 Magnificent Seven alternatives to own in 2020 may be modified as new information unfolds.
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