SAN JOSE, Calif. - The following article summarizes key technology sector trends and the top stock picks for 2011 from each of the technology analysts at Canaccord Genuity.
The investment banking firm's recommended stocks for 2011 include the following companies: CSCO, JNPR, NTAP, QCOM, AAPL, SMSI, SWIR, CTCT, PEGA, DGI, GEOY, TNAV, TRMB, RNWK, ROVI, ATML, ATHR, ISIL and NVDA.
Stocks the firm would avoid on lower 2011 return probabilities include FFIV, EMC, ERIC, SFSF, OPEN, SWI, GRMN, NFLX and INTC.
Here's a breakdown of each sector based on a research report from Canaccord Genuity:
Top picks in telecommunications/storage
NetApp (NTAP) - ''This past November the company released the most comprehensive product refresh in its history.''
Juniper (JNPR) - ''Juniper is also a solid product cycle story in 2011 driven by the company’s recent T4000 core router introduction.''
Cisco (CSCO) - ''Cisco’s challenges in calendar 2010 have been well documented. However, the company is undeniably a leading participant in what we expect to be some of the highest growth markets and geographies over the next several years.''
Top picks in communications
Apple (AAPL) - ''We believe Apple shares will outperform again in 2011. We believe a CDMA iPhone will launch during Q1/11, with a likely launch during February. Finally, we expect iPhone 5 will launch in mid-C2011.
We are modeling a sell-in of 6.3 million iPads for Q4/10. We believe Apple will remain the dominant supplier of tablets during 2011. While we anticipate competing tablets such as the PlayBook from RIM and Android tablets from OEMs such as LG and Motorola (with Android 3.0) will launch during the Q2/11 timeframe, we believe these products will launch at the same time as the iPad2 and we believe consumers will overwhelmingly choose the iPad2 versus these new models. We believe Apple will ship roughly 27 million iPads in C2011 and will account for roughly 48 percent of the total tablet market of roughly 57 million units
Qualcomm (QCOM) - ''We remain impressed with Qualcomm’s competitive position. During its December Analyst Day, Qualcomm management guided to an implied royalty rate of 3.3 percent in F2011 (based on the midpoint of their guidance). In fact, management indicated the core handset-based royalty rate (primary
driver of the implied rate) should remain flat year-over-year in F2011.''
Smith Micro (SMSI) - ''Smith Micro is well positioned for strong growth trends due to its strong connectivity business relationships with all leading North American carriers combined with its expanding suite of wireless software offerings.''
Sierra Wireless (SWIR) - ''We believe Sierra Wireless is well positioned for strong 2011 EPS growth driven by strong mobile computing trends due to a 4G upgrade cycle and an expanding M2M pipeline.''
Top picks in semiconductors
Atheros Communications (ATHR) - ''In 2011, we believe Atheros is likely to deliver upside to consensus estimates as it benefits from increasing attach rates of Wi-Fi in mobile phones and TVs and a better than seasonal notebook build in Q1 driven by Sandy Bridge.''
Atmel (ATML) - ''With a strong position in the rapidly expanding smartphone and tablet markets, we believe Atmel is likely to see upside to consensus estimates in H1/11.''
Intersil ((ISIL) - ''We believe notebook share gains with Sandy Bridge and ramping industrial warrant a 'BUY' rating.''
Nvidia ((NVDA) - ''With a strong Tegra2 product cycle for smartphones and tablets, and potential for notebook share gains (against a backdrop of better than seasonal Q1 PC build), we reiterate our 'BUY' rating.''
This part of the economic cycle should start favoring large caps anyway, but one big variable is whether or not the U.S. government will work a deal on fund repatriation. If they do, then the large multinational corporations will suddenly have better access to their overseas cash. That would give Google, Microsoft, and others a real boost.
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