Oppenheimer lowers its Electronic Arts (EA, $90.66) price target to $115 from $132. 

The company’s long-term growth story remains intact thanks to EA’s diversified IP portfolio as well as its strategic focus on live services and technology innovation, says the firm.

However, OpCo believes the stock warrants a lower multiple than peers because of the company’s near-term execution challenges and competitive pressures.

EA last night guided the December quarter below estimates, while maintaining fiscal 2019 guidance.

EA shares on Monday hit a new 52-week low at $89.12.

Citi trims its Facebook (FB, $146.22) price target to $175 from $185, saying 2019 could still be a transition year, with revenue growth headwinds from the Stories transition combined with expense growth that may not peak until the middle of the year. 

The firm is forecasting 19% annualized revenue growth over the next three years, along with stabilizing margins in 2020 and beyond.

Akamai Technologies (AKAM, $70.28) last night delivered above-consensus Q3 results, powered by 37% growth in the cloud security business, which now accounts for 25% of total revenue.

Akamai continues to bump up its bottom-line outlook. For 2018, the latest EPS guidance range of $3.53 to $3.59 is a nice boost from the previous guide of $3.26 to $3.38.

With a price target of $86, Cowen thinks Akamai shares are undervalued, saying the company’s shift in strategy, putting a greater focus on profitability, is playing out well. 

JP Morgan calls out the positive Q3 performance in security combined with margin expansion. The firm maintains its AKAM price target of $92.

Akamai shares this morning are up more than 13%.

Nomura Instinet starts Salesforce (CRM, $130.99) at ‘Buy’ with a price target of $181, saying the company has become a “dominant go-to platform for digital transformations.”

The firm believes Salesforce is a core long-term holding in the software space based on the company’s breadth and depth of products combined with its strong focus on the customer.

Goldman Sachs upgrades Proofpoint (PFPT, $89.42) to ‘Buy’ with a price target of $114, saying it likes the stock following last week’s earnings-related sell-off and estimate reset. The firm calls out Proofpoint as a category leader in email security that is growing more than 20%.

KeyBanc upgrades Proofpoint to ‘Overweight’ with a price target of $120. While last week’s 2019 initial guidance disappointed Wall Street, the downside over-reaction in the shares has created a compelling buying opportunity, says the firm.

Proofpoint shares this morning are up 7%.

IBM (IBM) will pay $190 a share to acquire Linux software provider Red Hat (RHT, $116.68) in a $34-billion deal. The buyout premium to Friday’s closing price is 63%.

The move will sharply ramp up the competitive battle in the hybrid cloud infrastructure space, where IBM is playing catch-up to Microsoft (MSFT) and Amazon (AMZN).

Jefferies thinks the “rich valuation” being paid by IBM (enterprise value/trailing 12-month subscription revenue ratio of 12.3x) is likely to keep other potential buyers on the sidelines. 

Morgan Stanley says the acquisition reinforces its confidence in the emergence of hybrid cloud architectures as well as the strength of IT spending headed into 2019. 

The firm says Red Hat has been Microsoft’s primary competitor within server operating systems, and has generally been taking share. IBM’s longer-term opportunity, or threat to Microsoft, hinges on its ability to execute well and maintain Red Hat’s open source enthusiasm, says Morgan Stanley.

JP Morgan lowers its Alphabet (GOOGL, $1,061) price target to $1,350 from $1,440 following last night’s Q3 earnings report, saying revenue came in a little light, but overall results continue to show that the company’s investments in the business are driving 20%+ growth.

Nomura Instinet ups its Intel (INTC, $46) price target to $55 from $50 following last night’s strong Q3 report. EPS of $1.40 beat the consensus estimate by 25 cents, while revenue rose 19% to $19.1 billion, above the consensus of $18.1 billion.

For Q4, Intel issued upside guidance: EPS of $1.22 (above the consensus of $1.09) on revenue of ~$19 billion (above the consensus of $18.4 billion).

The firm believes commentary around 2019 indicates that $5.00 in EPS is “doable, on fairly conservative growth.” Going into the Q3 report, the 2019 consensus EPS estimate was $4.26.

KeyBanc bumps up its Microsoft (MSFT, $107.67) price target to $125 from $123, citing a multi-year model transformation driven by the fast-growing cloud and Internet segments, which the firm estimates could top $70 billion in revenue by calendar 2020, vs. just $18.5 billion in CY’16.

Last night, Microsoft reported FQ1 (Sept.) EPS of $1.14, 18 cents above the consensus estimate, on revenue of $29.1 billion (+18.5% y/y), vs. the consensus of $27.9 billion.

KeyBanc says the Q1 revenue beat of $1.2 billion was “impressive,” marking the seventh quarter in a row of accelerated growth.

Microsoft shares this morning are up more than 5%.

Shares of Shopify (SHOP, $130.68) this morning are up more than 6% after the company—provider of a cloud-based e-commerce platform for SMBs—reports above-consensus Q3 results and offers upside guidance for Q4.

Revenue rose 57% to $270.1 million, beating the consensus of $257.8 million. EPS of four cents topped the consensus by six cents.

Powered by more merchants on the Shopify platform, Subscription Solutions revenue was up 46% to $120.5 million. Merchant Solutions revenue rose 68% to $149.5 million, driven by GMV, along with Shopify Capital and Shopify Shipping.

GMV in Q3 advanced 55% to $10 billion. GPV of $4.1 billion was 41% of GMV processed, vs. 37% in the year-ago period.

Shopify expects Q4 revenue of $315 million to $325 million, vs. the consensus estimate of $315.3 million.

Shares of Electronic Arts (EA, $99.76) yesterday fell to a new 52-week low at $97.80, taking out the December 2017 low of $99.63. 

The RSI at 28.3 is now in oversold territory. The 50-day moving average is trending downward from $115.16. 

During the recent market weakness, Tableau Software (DATA, $101.92) shares have managed to hold above their 200-day moving average at $94.47. 

The 50-day moving average is trading sideways from $107.36.

There’s short-term support at $97.67 and $94.81, with resistance at $105.70.

Wedbush reiterates its Microsoft (MSFT, $106.99) price target of $140, saying it believes the shift to the cloud is a major secular trend that is significantly benefiting the software giant. The firm expects cloud strength in Azure and Office 365 to continue into 2019. 

Wedbush is seeing a clear inflection point in the field, as more enterprises and government agencies make the transformational move to a hybrid cloud architecture, with Microsoft making a major partner push on the SMB front.

Needham starts Pivotal Software (PVTL, $18.73) at ‘Buy’ with a price target of $25, calling out the company as a key enabler for enterprises to become “software first.”

Pivotal is a provider of a cloud-native platform that allows developers to skip the undifferentiated requirements of application development, says the firm.

The company’s core offering—Pivotal Cloud Foundry—packages all of the services necessary to build an application (including runtime containers, middleware services, load balancing, network routing and operating systems) on a single platform, reducing the required, but mundane and often redundant tasks for developers.

Survey results from Piper Jaffray show that the Instagram unit of Facebook (FB, $154.84) has overtaken Snapchat as the most-used platform by teen monthly active users, and continues to lead social platforms as a channel for brand communications.

Piper Jaffray’s semi-annual survey of 8,600 teens indicates core Facebook usage is declining across age cohorts. 

The firm maintains its FB price target of $200, saying the company needs to execute to ensure monetization is strong on new platforms.

Nomura Instinet upgrades Intel (INTC, $44) to ‘Buy’ with a price target of $50 based on the current risk/reward set-up. 

Intel shares are off 23% from the multi-year high of $57.60 reached on June 4.

While still supply constrained until the 10nm ramp, the firm thinks Intel’s focus on production of Xeon and core processors will be positive for earnings and gross margin.

The firm at this point says it’s not sure if this upgrade is just a tactical call for the remainder of 2018 or a longer-term bullish call.

The momentum indicators show Electronic Arts (EA, $105.28) shares are trying to stabilize around current levels following the most recent decline from the October 1 high of $121.30. 

Last week’s low stands at $102.30. There’s short-term resistance at $109.36.

The 50-day moving average is trending downward from $117.10, while the 200-day moving average is trading sideways from $125.73.

Wedbush starts Zscaler (ZS, $37.75) at ‘Outperform’ with a price target of $48, calling the company a “disruptive first mover” in cloud security, with an innovative product umbrella and strategic focus. 

The firm thinks cloud security is in its very early innings of success, and believes Zscaler is one of the best plays in the sector.

MKM Partners maintains its ‘Buy’ rating on Marvell Technology (MRVL, $18.40), saying there are “various upside drivers”—including AI and 5G technologies—that could end up making current guidance conservative. 

The firm also calls out a discounted valuation relative to the peer group average. MKM keeps its MRVL price target at $27.

Baird starts FireEye (FEYE, $17.81) at ‘Outperform’ with a price target of $22, calling it a top pick in the security & infrastructure software space.

The firm likes the vision laid out by FireEye management around an automated platform for detection, response and remediation, but admits the company’s turnaround story “seems to be stuck in second gear.” 

Baird likes Amazon (AMZN, $1,822) shares on the recent weakness, saying it expects solid Q3 results. The firm sees continued strong momentum across high-margin business segments. 

Baird does caution that there could be some noise around Q4 profit margins due to higher labor costs and the potential for USPS last mile rate increases. 

The firm maintains its AMZN price target of $2,100.

Oppenheimer starts MongoDB (MDB, $68.94) at ‘Outperform’ with a price target of $80. 

The firm expects MongoDB to take advantage of secular themes emphasizing the importance of new database architectures. OpCo sees the company gaining share in a large and growing dynamic database market.

MongoDB shares are down from the all-time high of $85.25 reached in the middle of September.

Jefferies thinks the recent decline in PayPal (PYPL, $79.17) stock sets up an attractive entry point.

From the all-time high of $93.70 reached on September 13, PayPal shares were off 20% at the October 11 low of $74.66.

The firm remains bullish on the longer-term growth story at PayPal and the company’s ability to scale up over time. Jefferies maintains its PYPL price target of $110.

Twilio (TWLO, $69.45) announced last night that it would acquire SendGrid (SEND, $33.04), a cloud-based email marketing vendor, in an all-stock transaction valued at about $2 billion. The exchange ratio is 0.485. The deal is expected to close in the first half of 2019.

SendGrid’s email API will be added to the Twilio communications platform. The combination of Twilio and SendGrid will have 100,000+ customers and an annualized revenue run rate of more than $700 million.

Twilio shares this morning are off more than 8% on the news. Baird sees the weakness as a buying opportunity, reiterating its price target of $82. The firm is positive on the long-term opportunity because it thinks the SendGrid acquisition offers a strong strategic fit.

Goldman Sachs calls out multiple signs of rapidly slowing consumer demand in China, which the firm thinks increases risk to demand for Apple (AAPL, $218.79) products. The firm says much of its view of Apple’s upside potential was centered on Chinese demand for larger screen sizes. 

While the offsetting positive trend of 6”+ phone conversions is helping, Goldman believes Apple’s potential to “beat and raise” is likely reduced should weak consumer demand persist in China.

Goldman maintains its AAPL price target of $240, but has a ‘Neutral’ rating on the shares.

Shares of NVIDIA (NVDA, $243.29) remain below the 200-day moving average of $246.69. 

Traders will be keeping an eye on last week’s low of $234.26. At that low, the stock had corrected 20% from the all-time high of $292.76 reached on October 2.

Canaccord upgrades Square (SQ, $72.85) to ‘Buy’ and raises its price target to $90 from $60, saying the recent pullback in the shares creates a long-term opportunity in a “truly disruptive and well-run company.”

The firm sees the departure of CFO Sarah Friar as more about her going to a promising company as CEO, not her walking away from a risk. 

Nomura Instinet agrees, telling investors to focus on the company’s results, not the CFO. The firm does not believes Friar’s departure will disrupt the “innovation engine” behind the company.

Nomura Instinet keeps its SQ price target at $125.

Macquarie upgrades Microsoft (MSFT, $108.51) to ‘Outperform’ with a price target of $121 based on ample higher-growth drivers, including public cloud and a gaming services platform.

The firm says Microsoft has been differentiating Azure in several critical ways, such as being both enterprise-friendly and aggressive in layering in unique/incremental services—including AI, Stack, Sphere and a broad focus on edge computing.

Daiwa restarts coverage of NVIDIA (NVDA, $246.09) at ‘Buy’ with a price target of $335, saying the company is “arguably the most attractive secular growth story” in semis. 

The firm believes NVIDIA is one of the best ways to play the expected robust end-market growth powered by autonomous driving, gaming, AI and high performance computing (HPC).

Daiwa expects revenue growth of 35% and 14% in FY’19 and FY’20, respectively.

After falling below the 50-day moving average of $1,922 last week, Amazon (AMZN, $1,720) shares have picked up downside momentum. The RSI has dipped to 24.7. 

The next level to watch on the downside is the 200-day moving average, which is on the rise from $1,638. There’s support at $1,646 from June.

Amazon shares are off 16% from the all-time high of $2,050.50 reached on Sept. 4.

Morgan Stanley thinks the announced departure of Square (SQ, $73.25) CFO Sarah Friar will weigh on the stock near-term, saying she deserves credit for managing Wall Street expectations and helping the company deliver consistent beat-and-raise earnings reports. 

There’s uncertainty the new CFO will be able to match her track record, especially in light of the stock’s elevated valuation, says Morgan Stanley. The firm maintains its SQ price target of $75.

Deutsche Bank doesn’t expect Square’s momentum to change. The firm looks for a smooth transition given the company’s “deep” management bench and “history of solid execution.”

Square shares this morning are down more than 5% on news of the CFO’s exit.

JP Morgan adds Dropbox (DBX, $23.30) to the Analyst List, maintaining its price target of $35. While not convinced the “seven-day-old growth tech sell-off is over,” the firm sees an improving risk/reward balance on Dropbox shares and potential for 30% to 50% outperformance.

JP Morgan believes investors are “underestimating the stability and consistency of the Dropbox engine” and are overlooking the launch and adoption of the company’s Premium plans.

Dropbox shares are down sharply from the post-IPO high of $43.50 reached in June.

KeyBanc says a “Big Chill” has set in during the first nine days of October for the 55 largest SaaS stocks. The group is down 11% so far this month and is off 21% from the highs, on average, says the firm.

KeyBanc notes the group had an incredible run through the end of Q3, with multiple expansion levels—as measured by forward EV/S—increasing by two full turns above the five-year average.

Among the high quality SaaS stocks the firm would buy on the October pullback: Shopify (SHOP, $138), Salesforce (CRM, $144), Twilio (TWLO, $73.70), BlackLine (BL, $45.15) and Zendesk (ZEN, $62.18).

DA Davidson starts The Trade Desk (TTD, $134.24)—provider of a software platform used to manage digital ad campaigns—at ‘Buy’ with a price target of $158, calling out two “compelling” near-term strategic growth opportunities for the company:

1-Growing ad spend and available programmatic ad inventory for online video and connected TV content

2-Helping brands access fragmented, multi-device audiences in more efficient and data-driven ways

Trade Desk shares hit a new all-time high of $161.50 in late September.

Shares of Okta (OKTA, $60.53) yesterday closed below the 50-day moving average of $62.63. The RSI is falling from 35.1. 

The stock is now down 20% from the all-time high of $75.49 reached on Sept. 11.

There is short-term support at $57.72.

Goldman Sachs raises its Square (SQ, $91.08) price target to $108 from $77 based on raised revenue estimates through 2020, saying the company is sustaining 50%+ top-line growth while simultaneously delivering substantial margin expansion. The firm is modeling Square at 2.5x faster growth than PayPal (PYPL).

Citi raises its Apple (AAPL, $224.29) price target to $265 from $230 based on higher ASPs and stronger gross margin given the consumer preference for higher memory configurations of iPhones coupled with the new falling memory prices.

Headed into Q3 results, Oppenheimer remains upbeat on Facebook (FB, $159.82), maintaining its price target of $200. 

Given the current overwhelming negative sentiment surrounding the company, the firm says it sees a low bar for Q3, even if OpEx is higher than Wall Street expectations. OpCo adds engagement levels and monetization appear strong enough.

Goldman Sachs remains upbeat on FireEye (FEYE, $17.27) after attending the company’s annual Cyber Defense Summit, which the firm says saw the strongest showing in three years.

The firm maintains its price target of $22, while arguing FireEye shares could double if the company can gain just 200 basis points of market share in the endpoint and SIEM markets. 

Goldman says FireEye would need to improve its Helix business with on-prem integration as well as provide “better messaging to the channel.” The firm expects FireEye to move forward with a renewed scale push next year once the integration is complete.

Oppenheimer likes FireEye’s longer-term product strategy with Helix as well as the existing opportunity with “spoke” products such as Endpoint and Email Security, where the company has continued to expand capabilities up the stack. OpCo maintains its FEYE price target of $22.

Morgan Stanley downgrades Atlassian (TEAM, $87.50) to ‘Equal Weight’ based on valuation, noting the roughly 100% YTD move in the stock. 

The firm raises its price target to $94 from $75, but says the stock’s valuation already reflects durable growth of more than 30% and “substantial” margin improvement.

Atlassian shares on October 1 hit a new all-time high at $98.21.

Cloudera (CLDR, $17.08) and Hortonworks (HDP, $21.88) last night announced an all-stock merger of equals in a deal valued at $5.2 billion. 

The transaction is intended to create a market-leading hybrid cloud data management platform that should be able to more effectively compete with solutions from hyper-scale vendors, says Stifel. 

The firm believes the deal makes “a lot of strategic sense,” and raises its price CLDR price target to $25 from $22.

Hortonworks shareholders will receive 1.305 common shares of Cloudera for each share owned. Cloudera stockholders will own about 60% of the equity of the combined company.

The combined company will have roughly $720 million in revenue (TTM), with more than 2,500 customers. The deal is expected to close in calendar Q1 2019.

JMP Securities thinks the merger “makes a ton of sense” and represents a situation where “one plus one can indeed be greater than two.” 

The firm maintains its CLDR target of $27, calling out the scale of the combined company and the potential for significant cost synergies.

For more on Cloudera, see TechStock Radar—Sept. 6, 2018.

Shares of Intel (INTC, $49.54) have been rebounding off of the September low of $44.06, breaking the downtrend line from the June high. The RSI is rising from 63.3.

The stock has retaken both the 50-day moving average at $47.64 and the 200-day moving average at $49.21.

There is resistance from August at $50.60.

Bernstein believes Amazon (AMZN, $1,971) will be an accelerant of the disruption it sees coming to the healthcare sector. 

The firm thinks Amazon is developing a series of business strategies for entering segments of the healthcare market. Bernstein sees most disruption taking place in the online pharmacy and digital consumer healthcare niches. 

Canaccord Genuity downgrades Paycom Software (PAYC, $150.83), a provider of cloud-based HCM software, to ‘Hold’ based on valuation. 

The firm thinks the stock has “shot out ahead of the fundamentals” and needs some time to “catch its breath.” 

But Canaccord remains bullish on the company’s fundamentals, raising its price target to $150 from $130.

Paycom shares in the middle of September hit a new all-time high at $164.08. The 2017 year-end close was $80.33.

Nomura Instinet downgrades MongoDB (MDB, $78.86) to ‘Reduce,’ citing “extreme valuation.” 

The firm does raise its MDB price target to $63 from $43. Last month, the stock hit a new all-time high at $85.25.

Nomura Instinet believes MongoDB has a compelling multi-year opportunity, but says its faces “intense competition and deep-pocketed incumbency that won’t die easily.”

The current valuation assumes no risks for MongoDB. But the firm points out that in the last year alone, Microsoft’s Azure Cosmos DB offering went from zero to $100 million in revenue.

For more on MongoDB, see TechStock Radar—Sept. 18, 2018.

Barclays downgrades Intel (INTC, $47.12) to ‘Underweight’ and lowers its price target to $38 from $53, citing increased competition from smaller rival AMD (AMD).

The firm says Intel has “squandered its manufacturing lead, “ forcing the company to face “a costly battle to retain share amidst a near-term slowing of its end market.”

RBC Capital says Intel is prioritizing the production of its Xeon and Core processors to maintain it position in the high-performance segments of the PC market. The firm expects solid growth in datacenter and IoT to help offset PC headwinds. 

RBC trims its Intel price target to $55 from $57.

Canaccord Genuity downgrades Veeva Systems (VEEV, $108.87) to ‘Hold’ with a price target of $105 based on valuation, saying it’s moving to the sidelines “for a bit.”

The firm emphasizes that it has “zero qualms” about Veeva’s opportunity, execution or management team. 

Canaccord expects the stock to trade sideways for a period of time while the underlying business and metrics catch up with the valuation.

Last week, Veeva shares traded to a new all-time high of $109.05.