3 Tech Turnaround Stocks for 2012

NEW YORK ( TheStreet) -- While 2011 was a good year for tech stocks like IBM ( IBM) and Apple ( AAPL), it was a punishing one for less fortunate names such as Cisco ( CSCO), Renren ( RENN) and Advanced Micro Devices ( AMD).

There's good news, though, for investors. While Cisco, Renren and AMD were hit hard last year, all are poised for a turnaround in 2012.

Cisco

2011 was a messy year for Cisco. Shares fell nearly 11% after the network equipment maker's foray into the consumer space fell flat and distracted the company from its core networking business. In response, CEO John Chambers announced a turnaround plan that involved cutting jobs and a major revamp of the company's management structure.

While it may be too early to tell if Cisco's turnaround is working -- the company releases its second quarter earnings on Wednesday -- analysts are already bullish on the stock.

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Last week, Baird raised its full year 2012 revenue and earnings per share estimates and upped its price target to $21.

Auriga USA also raised its price target to $24, noting Cisco "is benefitingfrom a stronger enterprise/public sector spending environment and also improving product cycles in multiple segments."

Analysts on average are expecting Cisco to report earnings of 43 cents per share and revenue of $11.23 billion during the quarter.

Shares of Cisco have risen over 11% since the beginning of the year.

Renren ( RENN)

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Despite buzz around social media and Internet stocks last year, Chinese social networking site Renren saw shares tumble 80% following its May public offering.

But shares of Renren have reversed their course this year, shooting up over 40% since January as excitement builds over the looming Facebook IPO, rumored to be valued at between $75 million and $100 million. Investors likely believe that Renren can benefit from the same trends pushing up Facebook's sky-high valuation.

But while Renren hasn't yet achieved the same kind of user base as its U.S. counterpart--it has roughly 120 million active users versus Facebook's over 800 million--there is huge growth potential in the Chinese market as the number of Internet users explodes rapidly.

And Facebook isn't likely to pose much of a threat to Renren. While the social network has been trying to make inroads into China where it has virtually no presence, it's at risk of facing government regulations and censorship rules.

Advanced Micro Devices ( AMD)

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Shares Advanced Micro Devices slipped nearly 34% in 2011 as the chipmaker battled against Intel ( INTC) and tried to break into the market for powering smartphones and tablets.

In an attempt to reinvigorate the company, AMD ousted CEO Dirk Meyer in early 2011 and hired former Lenovo exec Rory Read months later.

Read said last week that the company is open to integrating third-party technology into its chips as it looks for new ways to push its products into tablets and better compete against Intel.

Analysts remain bullish on the stock, which has risen almost 30% this year. Last week, four analysts (Susquehanna, Canaccord Genuity, ThinkEquity and Raymond James) all raised their price targets on the company.

"We left with greater conviction regarding the company's ability to execute, both for manufacturing (fewer foundry missteps going forward) and design (zealously focusing on growth opportunities)," Canaccord analyst Bobby Burleson wrote in reference to the company's recent analyst day.

AMD may also benefit from a trend towards power efficient chips and a focus on emerging markets, Burleson said.

>>To see these stocks in action, visit the 3 Tech Turnaround Stocks for 2012 portfolio on Stockpickr.

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