Here are some things going on today in your world of tech :
Where next for Broadcom?
Following U.S. President Donald Trump‘s order late yesterday ordering Broadcom (AVGO) to relinquish its hostile bid for fellow chip maker Qualcomm (QCOM), Broadcom shares are up $8.73, or 3%, at $271.57, while Qualcomm shares are down $1.96, or 3%, at $60.86. NXP Semiconductors (NXPI), which Qualcomm has been in the process of acquiring for over a year, is up 21 cents at $123.83.
The Street is ready to move on, with several analysts this morning asking whether the company will quickly return to trying to buy something, or whether they’ll focus immediately on just paying more money to shareholders.
Craig Ellis of B. Riley offers some potential M&T targets including Xilinx (XLNX) and Mellanox Technologies (MLNX).
Shares of Xilinx and Mellanox are both up fractionally this morning.
As for Qualcomm, Mike Walkley of Canaccord Genuity reiterates a Buy rating, and an $86 price target, advising clients “buy on weakness.”
To Walkley, “the underlying fundamental value remains compelling,” and he expects China’s regulatory agency, MOFCOM, will approve the NXP deal “in the coming weeks.”
“Further, we believe Qualcomm could reach a potential licensing settlement with Huawei over the coming months. Should these two events occur, then we believe Qualcomm could generate roughly $6.00 in F2019 earnings.”
Could Marvell get Broadcom’d?
Benchmark‘s chip analyst Gary Mobley this morning asks whether the rejection of Broadcom’s bid could signal something bad for Marvell Technology Group‘s (MRVL) pending purchase of Cavium (CAVM).
Trump’s move is “very unusual,” and he notes that Marvell, which is domiciled in Bermuda, could conceivably have to re-domicile to the U.S. That could delay the deal “by a few months,” and being incorporated in the U.S. would drive up Marvell’s tax rate to 10% from 3%, he observes.
The break-up fee Marvell owes Cavium should it not happen is $180 million.
Marvell shares are down 9 cents, or 0.4%, at $24.28..
Estimates rise for Western Dig
Speaking of chips, Micron Technology (MU) is still rising on multiple price target increases yesterday, up another $3.34, or almost 6%, at $62.71, but Robert Cihra with Guggenheim Securities this morning puts the focus on Western Digital (WDC), reiterating his Buy rating after raising profit estimates to reflect a “re-acclerating raw storage demand” situation.
Cihra writes that spending by cloud computing operators is driving an upswing “in high-capacity enterprise HDDs and NAND/SSD growth re-accelerating with 3D supply.”
“NAND availability is improving and price declines have resumed, but we think NAND price pressure has so far been more moderate than many feared (e.g., looking down 4-5%Q/ Q vs. 7-9%Q/Q), increasing our WDC estimates further above consensus.” He now thinks Western can make $14.48 in EPS this fiscal year, versus consensus for just $14.03.
Western shares are up $3.03, or 3%, at $105.89.
Analysts are assessing the prospects revealed yesterday at the first-ever analyst day meeting of Nutanix (NTNX), the “hyper-converged” infrastructure company that went public in late 2016. The big focus is the company’s pledge to have $3 billion in annual “billings” come 2021.
Needham & Co.’s Jack Andrews reiterates a Buy rating on the shares, and raises his price target to $61 from $48, writing that after the meeting, he has “newfound visibility” into “the underlying customer economics driving Nutanix’s growth.” Those include things like up-selling customers to multiple software pieces such as ” Calm ” and ” Xi,” though Nutanix said it will wait until the beginning of fiscal 2019 to provide exact metrics about that.
And Andrew Nowinski of Piper Jaffray reiterates an Overweight rating and raises his target to $57 from $44, writing that the company is the “best-positioned hyperconverged vendor in the market and has a large enough Total Addressable Market capable of supporting the long-term targets management provided.”
Nutanix stock is up 65 cents, or 1%, at $52.13.
Amazon’s advertising no harm to Google
Jefferies & Co.‘s Brent Thill this morning assess the growing advertising business at Amazon (AMZN) and concludes it can reach $22 billion by 2022, rising 40% per annum, compounded annually.
That prompts him to raise his price target to $1,850 from $1,750.
However, it doesn’t have to come at Alphabet‘s (GOOGL) or Facebook‘s (FB) expense, he writes.
“We believe FB, GOOGL and AMZN are each leaders in this category and will continue to garner greater share of the overall shift of ad dollars online.”
“We also see FB & GOOGL benefiting from a growing SMB advertiser base and expansion into new verticals such as travel.”
Amazon shares this morning are up $9.12, or 0.6%, at 1,607.51.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.