Mizuho upgrades Qualcomm (QCOM, $67.45) to ‘Buy’ with a price target of $75 following the report of a possible buyout of NXP Semiconductors (NXPI, $96.12). 

The firm likes the idea of a QCOM-for-NXPI transaction, saying it makes strategic and financial sense. Qualcomm needs to diversify its business away from the maturing handset market. 

With Qualcomm already dominating auto telematics, a potential acquisition of NXP Semi would give it an even bigger presence in the car space (including powertrain and safety), creating the first end-to-end semiconductor auto supplier of the future, says Mizuho.

In the security space, Palo Alto Networks (PANW, $156.08) shares today showed relative strength, gaining 0.9% during a session in which the tech-heavy Nasdaq Composite fell 0.9%.

The intraday high of $157.43 took out the April 28 high of $157.28.

The 50-day moving average of $139.48 is on the advance and headed for a potential upside crossover of the downwardly sloping 200-day moving average at $143.28. The RSI is up to 69.6.

Shares of NXP Semiconductors (NXPI, $97.39) this afternoon have surged more than 18% on takeover speculation. 

The WSJ reports Qualcomm (QCOM) is in talks to acquire NXP Semi in a deal “that would likely be valued at over $30 billion.” 

Sources tell the paper a deal could be struck in the next two to three months. However, there is no guarantee of a transaction. 

Some of the people familiar with the matter say Qualcomm is also exploring other deal options, according to The WSJ.

At current prices, NXP Semi’s market cap is $33 billion.

For more on NXP Semi, see our company profile in the June 2016 issue of Tech-Stock Prospector (TSP #172).

Akamai Technologies (AKAM, $53.56) shares have rebounded back above the 200-day moving average of $52.37 and the 50-day moving average at $52.81. 

A close above ~$54.20 would break through the downtrend line from the July high of $58.47. There is short-term resistance at $55.95.

In late July, always-volatile Akamai shares fell to a low of $47.80 on the day after the Q2 earnings report.

Barclays names Western Digital (WDC, $58.01) its new ‘Top Pick’ in IT hardware, citing improving end markets, reduced industry manufacturing capacity and the potential for further operational synergies. 

Western Digital is showing a favorable mix in both HDD and SSD, with particularly good pricing conditions in NAND flash, says the firm. Barclays maintains its price target of $61.

For more on Western Digital, see TechStock Radar—Sept. 14, 2016.

Following the sharp rise (+66% YTD) in shares of Shopify (SHOP, $42.91), Morgan Stanley cuts its rating to ‘Equal Weight’ with a price target of $47. The firm still remains bullish on the business, saying it expects a Q3 beat.

For more on Shopify, provider of a cloud-based commerce platform for smaller businesses, see TechStock Radar—June 29, 2016.

In the June 2016 issue of Tech-Stock Prospector, we listed Shopify as a potential takeover target. At the time, the stock was trading around $29.60.

In a breakout session yesterday, shares of cybersecurity solutions vendor Qualys (QLYS, $38.10) pushed through short-term resistance at $37.56. 

The next resistance stands at the 52-week high of $39.74 reached in early December 2015. 

The RSI is up to 71.7. The 50-day moving average continues to trend upward from $33.80.

First Analysis starts SPS Commerce (SPSC, $73.36)—a provider of cloud-based supply chain management solutions—at ‘Overweight’ with a price target of $86, calling the company a market leader in enabling retail supply chain business data exchange and ancillary services. 

The firm believes SPS has solid growth opportunities over the medium term (the 2016 consensus revenue estimate of $193.2 million indicates growth of 21.9%) and is executing well.

For more on SPS, see TechStock Radar—Sept. 21, 2016.

SunTrust likes NXP Semiconductors (NXPI, $82.53) shares at current levels, saying it believes most of the company’s businesses will have bottomed by next year, setting the stage for margin expansion. The firm reiterates its price target of $104.

During a down session for the tech sector (Nasdaq Composite -0.9%), Paycom (PAYC, $50.43) shares showed relative strength, gaining 0.8%. 

The stock last week retook its 50-day moving average at $49.43. There is short-term resistance at $50.91. The all-time high of $52.93 was reached on September 6.

For more on Paycom, see TechStock Radar—August 3, 2016.

Shares of recent IPO Acacia Communications (ACIA, $109.24), a provider of optical interconnect products, are down more than 8% today after the company filed for a $450-million secondary offering (~$325 million for selling stockholders).

In addition, Acacia raised Q3 guidance:

*Revenue: $127 million to $131 million (previous: $120 million to $128 million)

*EPS: 72 cents to 81 cents (previous: 64 cents to 76 cents)

Acacia went public in May at $23 a share; the stock opened for trading the first day at $29. The post-IPO high of $128.73 was reached on September 7.

For more on Acacia, see the August 2016 issue of Tech-Stock Prospector (TSP #175).

UBS keeps its ‘Neutral’ rating on Netflix (NFLX, $95.94), saying recent survey results show U.S. consumer satisfaction with competitors Amazon Prime and Hulu is on the rise. 

The firm advises investors to continue to monitor competitive threats closely, as Netflix leads the streaming video category, but the overall battle for consumer media time, attention and wallet has intensified. 

UBS maintains its price target of $92.

Stifel thinks today’s 5% pullback in Salesforce (CRM, $70.39) shares presents a buying opportunity ahead of the Dreamforce conference. 

The firm sees little reason why Salesforce would need to own Twitter (TWTR, $22.62). Salesforce’s Marketing Cloud and Service Cloud have been using data from Twitter’s open APIs for years. Stifel maintains its price target of $93.

Shares of Imperva (IMPV, $50.50 pre market, +16.3%) are up 16% in pre-market trading following a Bloomberg report last night about potential buyout interest in the provider of cybersecurity solutions. 

OpCo believes Imperva’s product lines align particularly well with those from Cisco and IBM. The firm sees a potential buyout range of $55 to $60 a share if the deal speculation has merit and there is sufficient interest from multiple bidders.

Imperva is a holding in the TSP Small-Cap Portfolio.

For more on Imperva, see TechStock Radar—July 11 & June 21, 2016.

After Cornerstone OnDemand (CSOD, $46.27) shares last week rebounded off of the 50-day moving average of $44.24, traders are wondering if there is enough upside momentum to test the 52-week high of $47.75 reached earlier this month.

Shares of SPS Commerce (SPSC, $71.14), a provider of cloud-based supply chain management solutions, are up more than 5% today on the announcement that the stock is being added to the S&P SmallCap 600 index.

Back in the January 2013 issue of Tech-Stock Prospector (TSP #131), we called SPS Commerce a small-cap cloud name to watch based on the company’s expanded POS analytics solutions and strong overall growth profile. At the time, SPS shares were trading around $38.60.

On August 15, shares of Twilio (TWLO, $56.76) hit a post-IPO high at $66.40. 

Following a pullback, the stock has run into resistance at a series of lower highs: $61.35, $60.69 and $59.40. There is short-term support at $52.77 and $49.61.

Twilio, provider of a cloud-based communications software platform, went public in June at $15 and opened for trading the first day at $23.99.

UBS believes HP Enterprise (HPE, $22.78) shares still offer an attractive valuation even though they are up about 50% YTD.

The firm reiterates its price target of $24.50, saying the recent divestitures of services and software leave HP Enterprise primarily as a hardware supplier in the server, storage and networking segments.

The company can innovate in hardware and provide complete solutions through its extensive partnerships, says UBS.

Evercore ISI raises its Microsoft (MSFT, $56.93) price target to $67 from $60, saying the more-recurring nature of the company’s business model today (versus three to four years ago) can continue to drive a premium multiple. 

The firm believes fiscal 2018 could prove to be an inflection point in the business model in terms of EPS growth, as cloud margins should improve on more normalized CapEx and OpEx.

MKM Partners downgrades Arista Networks (ANET, $82.04) to ‘Neutral’ and lowers its price target to $79 from $81 because of concerns that the transition to all-onshore U.S. procurement and manufacturing could cause gross margin to come in below expectations.

For Q4, the firm takes its gross margin estimate down to 62.1% from 63.3% (guidance: 60% to 65%), with the 2017 forecast lowered to 62.5% from 63.3% (consensus: 63.9%).

On Friday, Arista shares hit a 52-week high at $85.10.

Infoblox (BLOX, $22.83), a provider of automated networking control & security solutions, will be acquired by private equity firm Vista Equity Partners for $26.50 a share in cash in a deal worth ~$1.6 billion.

The deal premium is 33% based on the average closing share price over the past 60 trading days, and 73% compared to Infoblox’s closing price on May 11, when media reports first surfaced about the company as a potential takeover target.

In April, activist investor Starboard Value disclosed a 7.5% stake in the company, believing the shares—trading around $16.20 at the time—were undervalued. (See Tech-Stock Radar—April 25, 2016).

Today’s Q3 guidance boost at Intel (INTC, $37.67) sent the shares up 3% on heavy volume (3.3x average daily volume).

The stock hit a new 52-week high at $38.05. Actually, that was the highest price seen since early 2001.

Intel is a long-time holding in the Tech-Stock Prospector Vulture Portfolio, added when the stock traded at $23.86.

Baird boosts its Intel (INTC, $37.41) price target to $42 from $40 after the chipmaker raised Q3 revenue guidance. 

The firm believes accelerating datacenter order momentum will help Intel’s outlook in Q4 and potentially into Q1’17. 

Plus, Baird says an initial iPhone 7 teardown shows Intel’s baseband inside, with an estimated 40% market share and $12 to $13 of content. The firm believes Apple will retain its market share position in the iPhone 8.

Evercore ISI raises its Amazon (AMZN, $769.69) price target to $1,015 from $930 based on expectations that order fulfillment will provide less of a P&L margin drag than previously estimated. 

The firm believes Amazon will automate a variety of aspects of its retail business via artificial intelligence and machine learnings, which could save the company up to 80% per unit.

Investors today piled into Apple (AAPL, $115.56), sending the shares up 3.4% on big volume (2.4x average daily volume). 

As recently as Monday, Apple shares traded to a low of $102.53.

The next important resistance level (from December) is around $120. The 52-week high of $123.82 was reached in early November.

Apple is a long-term holding in the Tech-Stock Prospector Vulture Portfolio, added in May 2013, when the stock traded around $61.70.

Guggenheim starts Symantec (SYMC, $24.87) at ‘Buy’ with a price target of $30, saying it believes the company has finally turned the corner. 

Symantec is one of few vendors in security to surpass $1 billion in annual revenue, with a strong presence across consumer and enterprise markets, says the firm. 

With a 100% security offering, an ambitious product roadmap and now a best-in-class network security business (from the Blue Coat acquisition), the pieces are in place for Symantec to reclaim its crown, according to Guggenheim.

The firm believes Symantec’s natural competitive advantages—brand recognition, a massive installed base and unparalleled threat telemetry—position it well for the future. 

Credit Suisse modestly raises its Apple (AAPL, $111.77) iPhone unit sales estimates because of recent indications (including positive comments from both Sprint and T-Mobile) that the iPhone 7 cycle may be stronger than expected.

For calendar 2016, the firm now sees handset sales of 215 million units, vs. 208 million previously. For calendar 2017, the forecast goes to 221 million units from 217 million.

Credit Suisse reiterates its Apple price target of $150.

Shares of Arista Networks (ANET, $83.81) today are up 3.8%. This morning, the stock hit a 52-week high at $84.27. The RSI is up to 74.1.

Deutsche Bank lifts its Arista price target to $85 from $80, saying it has high conviction in the datacenter switch vendor’s ability to meet or beat 2017 and 2018 consensus revenue estimates because of solid near-term demand trends at hyperscale cloud customers. 

The next resistance levels to watch: $87.60 (August 2015), $88.25 (July 2015) and $88.56 (June 2015).’

In the July 2016 issue of Tech-Stock Prospector (TSP #173), we wrote that the Arista rally off of the June 27 low of $60.51 could have legs because of the long-term growth outlook for the company and its solid competitive positioning against chief rival Cisco Systems (CSCO). Arista shares at the time were trading around $69.90.

Shares of Pure Storage (PSTG, $13.39) have rebounded 21% from the August 26 low of $11 and have retaken the 200-day moving average at $13.28. The RSI is rising from 65.3. The 50-day moving average is trending upward from $12.27.

There is short-term resistance at $13.57 and $13.97.

For more on Pure, see TechStock Radar—August 31, 2016.

Longbow Research upgrades Western Digital (WDC, $52.37) to ‘Buy’ with a price target of $70 based on favorable near-term demand trends. The firm also looks for the SanDisk acquisition to help boost the bottom line going forward.

Longbow says the SanDisk deal was expensive, dilutive to near-term models and hard for Wall Street to digest. But it now believes Western Digital is primed to “reap the spoils as a one-stop, vertically integrated, media-agnostic storage provider that should generate substantial earnings accretion in FY’18 on the favorable demand backdrop combined with reductions in operating and interest expenses.” The firm’s FY’18 EPS estimate is $5.90.

Shares of security solutions vendor Qualys (QLYS, $35.48) today were showing relative strength up until the final hour. The stock this morning got a boost from a Wunderlich upgrade, hitting an early high of $36.61.

As part of a coverage transfer to another analyst, the firm raises its rating to ‘Buy’ with a price target of $43, saying investors are under-appreciating the fundamental evolution within the vulnerability management (VM) segment (80% of Qualys’ revenue) toward active detection capabilities that could significantly increase the value of the company’s core offering.

Wunderlich believes core VM revenue growth could be sustainable in the 20% to 22% range, well above expectations for deceleration to 14% to 15%. For non-core products (mainly policy compliance and Web app security), the firm forecasts what it considers a conservative 16% growth rate for 2017.

Pacific Crest sees the recent weakness in Broadcom (AVGO, $164.48) shares as a buying opportunity, saying it expects the chipmaker to continue to benefit from content expansion in smartphones. 

In addition, M&A synergies should enable Broadcom to generate strong earnings growth and margin expansion, says the firm. Pacific Crest maintains its price target of $200.

Gigamon (GIMO, $46.43) stock has been trying to make it back to the all-time high of $47.45 reached in the middle of August, but keeps getting turned away just below the $47 level. 

A close above $46.93 would be a positive sign.

The 50-day moving average is trending upward from $43.05. There is short-term support at $43.25.

Apigee (APIC, $16.34), a provider of API management software, will be acquired by the Google unit of Alphabet (GOOGL) for $17.40 a share in cash. The $625-million deal is expected to be completed by the end of this year.

At the buyout price, Apigee shares will have gained 110% since we profiled the company in the December 2015 issue of Tech-Stock Prospector (TSP #166). At the time, we pointed out that Apigee, a beneficiary of the cloud and mobile megatrends, was under-followed on Wall Street even though the company had just delivered a strong quarterly report.

Pre-orders for the Apple (AAPL, $107.41) iPhone 7 start on Friday, with shipping beginning on September 16. The 7 starts at $649 and the 7+ starts at $769. 

The new AirPods wireless headphones, priced at $159, will be available in October.

Shares of Broadcom (AVGO, $168.50) continue to show weakness (the RSI is falling from 42.5) and are now approaching the 50-day moving average at $165.88.

The 26% rally off the June low of $142.27 took the stock to an all-time high of $179.42 on August 30.

Brean Capital reiterates its Marvell Technology (MRVL, $12.94) price target of $15 because it likes the company’s new strategic plan to focus on core markets. A restructuring or major cost cutting initiative is likely the next step, says the firm.

In June, Marvell named Maxim Integrated Products veteran Matt Murphy as the new CEO.

After dealing with short-term congestion just below the $76.90 level, ServiceNow (NOW, $77.72) shares are now trying to gain positive momentum, pushing to the top of the recent range. Traders are watching the July high of $78.77 for signs of a breakout.

The 50-day moving average, which crossed above the 200-day average in early August, is starting to skew to the upside from $72.05.

Shares of CyberArk Software (CYBR, $57.08) have pushed through short-term resistance at $57.57 from early August on heavy volume. Earlier in the session, the stock hit a 52-week high at $58.49.

The next resistance level to watch: $61.80 from August 2015.

The 200-day moving average is trending upward from $44.73.

Here are the current security names showing the most upside momentum (ranked by RSI):

*Mimecast (MIME, $17.22)—86.7

*Symantec (SYMC, $24.28)—81.6

*Varonis (VRNS, $30.21)—78.3

*Barracuda (CUDA, $23.96)—72.8

*Proofpoint (PFPT, $79.36)—67.7

JP Morgan lifts its Broadcom (AVGO, $172.84) price target to $220 from $195 based on continued solid execution in terms of the company’s diversification strategy.

Barclays goes to $205 from $185, citing strong growth in the wireless unit due to content gains at Apple (AAPL).

Mizuho raises its Broadcom (AVGO, $177.09) price target to $200 from $190 following last night’s fiscal Q3 (July) report. EPS of $2.89 beat the consensus estimate by 12 cents, while revenue of $3.8 billion came in above the consensus of $3.76 billion. Gross margin of 60.4% was up from 60% in FQ2.

The firm notes the wireless segment (27% of revenue) was up ~27% sequentially, with guidance for the October quarter up 30% sequentially. Broadcom saw strong 2H datacenter orders and better momentum on the HDD/SSD side.

For FQ4, Broadcom expects revenue of $4.025 billion to $4.175 billion, vs. the consensus of $4.05 billion. Gross margin guidance: 59.5% to 61.5%.

Shares of chipmaker Marvell Technology (MRVL, $12.87) today gained 3.7% on heavy volume. The stock hit a new 52-week high at $12.88. The next resistance level to watch is $13.35 from August 2015.

Since the 52-week low of $7.40 in February, the stock has rebounded 74%. Just since the June 27 low of $9.05, MRVL shares have advanced 42%.

In Q2, Contour Asset Management boosted its Marvell stake by 60%, adding 3.31 million shares. The tech-focused money manager (64% tech-sector weighting) now owns 8.78 million shares, making it the #12 holder.

OpCo reiterates its Salesforce (CRM, $75.47) price target of $95, saying it does not see FQ2 results (deceleration across most financial metrics driven by negative currency movements and a soft late-July in the U.S.) as a harbinger of bad things to come. 

The firm believes most of the issues were unique to the July quarter and are likely transitory.

OpCo sees Salesforce heading to a stronger position for share gains and monetization activity across its large installed base from several new product cycles (commerce, analytics, IoT, verticals).