A few days before the end of 2023, it can already be concluded that The shares of technology companies have been one of the big winners of the year, especially those that bet on Artificial Intelligence (AI). In fact, the Nasdaq has accumulated an advance of more than 40% in the last 12 months.
Now, which companies have growth potential for 2024? Analysts at Morgan Stanley (MS) outlined an answer to the question and listed their favorite stocks in this segment heading into next year.
Favorite Tech Stocks for 2024: Amadeus
Firstly, from MS they look at companies specialized in the software development and marketing, among which the potential of the Spanish stands out Amadeusfor which they establish an ‘overweight’ recommendation and a target price of 75 euroswhich gives it a revaluation potential of close to 15% from current price levels.
The majority bet on the firm is within the consensus of analysts, since 67% of them advise buying it, while 29% recommend ‘hold’ and 4% opt for selling the asset., according to Refinitiv data. At Morgan Stanley they also establish a bullish scenario, in which the firm’s shares would rise up to 72%, and a bearish one, which would leave falls close to 27%.
In its latest projections for the whole of 2023, the company expected year-over-year revenue growth of 20% to 22.5%as well as an increase in fixed costs of between 10% and 14% and a net cash flow towards the upper end of the range of 1,000 to 1,050 million euros.
Favorite Tech Stocks for 2024: Darktrace
Another company that these analysts are bullish on is darktrace, which has a ‘overweight’ recommendation shared by 80% of experts and a target price of £485, so if this base case is met it would gain 32%. In the best case scenario, its shares could gain up to 113%, while the most negative view anticipates losses of up to 50%.
The company expects to close this year with a increase in income between 22% and 23.5%with an adjusted Ebitda margin of between 17% and 19%.
Favorite Tech Stocks for 2024: Dassault Systemes
The third software firm they choose is Dassault Systemsfor which they also recommend ‘overweight’, although with lower potential profits than the previous ones, since according to this forecast The shares would rise close to 2%, to 44.5 euros. This figure can be expanded to 23% in the most bullish scenario, while in the least constructive case they would fall by 46%.
Favorite Tech Stocks for 2024: WAG Payment Solutions
When it comes to firms dedicated to financial technologies, one of Morgan Stanley’s favorite companies is WAG Payment Solutionswhich has an ‘overweight’ recommendation that is unanimous among the consensus, since all prominent analysts recommend its purchase.
He target price set by the firm is 145 poundswhich leaves a margin of improvement of 67% from its current price, although the most bullish scenario incorporates potential gains of 102%.
Favorite Tech Stocks for 2024: Wise
The other company dedicated to this activity that has a purchase recommendation from MS is wisealthough for this they expect a lower performance, which would be 9% in their base case and 85% in the best case, while The most bearish scenario foresees a decrease of 33%.
Among the consensus, 62% of analysts advise buying this valuewhile 23% opt for ‘maintain’ and 15% opt for selling.
The company expects total revenue growth of 33% to 38% in its fiscal year 2024while it anticipates Ebitda margins that will be “equal to or greater” than 20% in the medium term.
Favorite Tech Stocks for 2024: Exclusive Networks
Finally, MS analysts focus on companies whose core business is information technology. His first recommendation in this field is Exclusive Networksfor which they establish a base case with a target price of 24 euros, which would mean an increase of 28%.
The most bullish scenario for this firm sets the target price at 33 euros per sharewhich would raise profits to 73%, while the most negative possibility foresees a decrease of 12%, to 17 euros per title.
The company’s latest projections point to gross sales for the whole of 2023 above 5,150 million euroswith a net margin of between 450 and 465 million and an adjusted Ebitda of 172 to 178 million.
Favorite Tech Stocks for 2024: Ionos
Finally, MS analysts also recommend ‘overweight’ Ionosas do 91% of consensus analysts, while the remaining 9% advise ‘hold’.
In the base case, the firm’s shares would rise 29%, to 18.6 euros, while If the assumptions established in the bullish scenario are met, the gain would be 74%. In the worst case, MS contemplates drops of up to 27%.
Source: Ambito
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