NEW YORK (
) -- From
, Silicon Valley has painted a picture of
this earnings season.
The Nasdaq has gained just 0.4% in the past month, although Topeka Captal Markets analyst Brian White sees Apple,
as the stocks most capable of shining through the gloom.
"We expect the macro environment to remain challenging," he said in a note, but cited the mobile Internet, cloud computing and storage/big data as offering salvation to investors. "Companies that are heavily exposed to these key trends will be able to outgrow tech in total."
Big data refers to the
of unstructured data. Examples include email messages, PowerPoint presentations, audio, video and social media information.
Still, though, there are undoubtedly clouds gathering over the tech sector.
CFO Kevin March, for example, recently
that the economy, both globally and domestically, is growing at a slower pace. March acknowledged the European headwinds
by other tech heavyweights such as Intel, as well as a slight slowdown in China, but warned investors not to panic.
Nonetheless, Topeka's White expects good things from Apple, EMC, VMware and F5 Networks.
Read on for more details on why these stocks are poised to outperform:
Apple missed both analysts' top and bottom line estimates in its third-quarter results last week, but remains perfectly poised to tap the mobile Internet boom. Weighed down by economic weakness in Europe, Australia, Canada, and Brazil, the Cupertino, Calif.-based firm also suffered a lull in iPhone sales ahead of the eagerly-anticipated launch of a new device.
There were, however, positives in Apple's third-quarter numbers, such as an 84% year-over-year hike in iPad sales, with Tim Cook citing unprecedented demand from the education sector.
With rumors swirling that an iPhone 5 and an iPad Mini could debut as soon as
, followed by an Apple TV maybe in time for the holiday season, there are plenty of positive catalysts ahead for Apple.
Recent quarterly results from key Apple chip suppliers
for example, have been cited as
of an imminent iPhone launch.
White has a buy rating and $1,111 price target on Apple.
"With the iPhone 5 launch on the horizon and other potential new products in the coming quarters, we believe Apple's stock is prepared for the next major leg up that could propel Apple to our $1,111 price target over the next year," he explained White, in a note.
The storage giant shrugged off global macroeconomic weakness to
Wall Street's second-quarter revenue forecast earlier month, continuing its run of
One of the key players in
and the emerging
market, EMC has enjoyed 10 consecutive quarters of double-digit year-over-year top and bottom-line growth.
Shares of the Hopkinton, Mass.-based firm have climbed 21.82% to $26.24 this year, although Topeka's White still sees a buying opportunity for investors.
"Given EMC's growth prospects, expanded portfolio, the positive trends in the storage market, 80% interest in VMware and historical P/E of 18x, we believe this is a reasonable valuation," he said.
The recent management reshuffle at EMC and its VMware subsidiary has also been cited as a
for the company, providing a solid succession plan for CEO Joe Tucci.
Majority-owned by EMC, virtualization trailblazer VMware also beat Wall Street's estimates in its
earlier this month.
Additionally, VMware announced the $1 billion acquisition of
earlier this month, which is seen as boosting its network virtualization credentials.
Another key player in the push towards cloud computing, VMware has seen its shares climb 9.46% this year to reach $91.14. Topeka's White, however, has a 12-month price target of $120 on the company.
"This equates to a straight P/E of 38x our Calendar Year 13 EPS estimate," he explained, in a note. "We believe the market will be willing to pay such a multiple for an industry leader that has grown EPS by 39% per year for five years."
Prompted by its strong second-quarter results,
VMware from 'hold' to 'buy' with a $110 price target recently, noting that the company is performing well, despite currency headwinds.
F5 met analysts' estimates in its
earlier this month, growing revenue and earnings sequentially and year-over-year despite a cautious spending climate.
rival earned $1.14 a share on $352.6 million of revenue, up from 97 cents a share and $290.7 million in the prior year's quarter. Analysts surveyed by
expected earnings of $1.14 per share on $352.86 million in revenue for the quarter.
Despite some concern from analysts about
and a share price that has plunged 11.9% to $93.65 this year, Topeka's White has a buy rating and $132 price target on F5.
ISI Group analyst Brian Marshall also has a buy rating on F5, as well as a $140 price target. Application networking, he explained in a note, continues to be a secular growth market, with year-over-year annual growth around 10%.
Marshall estimates that F5 will grow revenue around 19% in calendar year 2012 and around 15% in calendar year 2013, similar to Apple and VMware.
Already reaping the benefits of the explosion in mobile data traffic growth, the Seattle-based firm says that it's well positioned for the growth in high-speed 4G LTE networks.
"We have won several projects that are LTE-based," explained F5 CEO John McAdam, during a recent
. "We have said that we think fiscal 13 is going to be where we really expect the growth, but we won some projects last quarter based just on that."
--Written by James Rogers in New York.
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