Tech Today: SnApple? Hiking Micron Numbers, Splunk M&A Bait?


Here are some things going on today in your world of tech :

Apple for Snap?

Shares of Snap (SNAP), makers of the Snapchat messaging platform, are down 3 cents at $17.99 in early trading after Alex Heath of Cheddarreported yesterday that the company is cutting 10% of its engineers, or 100 people, its largest-ever layoff, citing multiple unnamed sources. CNBC picked up the news this morning.

In other Snap news, Vanity Fair's Nick Biltonwrote yesterday that Apple (AAPL) could end up buying Snap," according to an "increasingly popular Silicon Valley dinner-party parlor game."

Bilton suggests Apple needs to do this, writing that "one thing is clear: if Apple doesn't buy Snap, it might turn around to regret it."

"If Snap can manage to defend itself against the copy-and-paste attack of Zuckerberg, Snap could very well end up competing with Apple for teens' eyeballs in an augmented-reality world. And that could end up being a fight that Tim Cook can't win."

Okta's metrics shine

Shares of identity management technology provider Okta (OKTA) are up $1.61, or 4%, at $40.75, adding to last night's after-hours gains, after it yesterday afternoon beatfiscal Q4 revenue and profit expectations, and beat with its forecast.

Price targets are zooming this morning at many shops. For example, Alex Henderson with Needham & Co. reiterates a Buy rating, and raises his price target to $50 from $38, writing that even though the company had pre-announced last month, it still beat the revenue it previewed, and "fore a pure SaaS model, these are exceptionally strong numbers." That includes "new billings growth" of 67% in the quarter, and subscription revenue growth of 64%.

Broadcom smears Qualcomm

In the continuing war of words between Broadcom (AVGO) and the target of its hostile takeover bid, Qualcomm (QCOM), the former this morning filed with the Securities & Exchange Commission an infographic pertaining to Qualcomm's involvement with Chinese companies such as Huawei and with the Chinese government.

Reviewing the situation, David Faber of CNBC this morning points out CFIUS, which is reviewing the security implications of a potential deal, has said it has concerns about "Broadcom's relationships with third party foreign entities," without elaborating on that.

Broadcom shares are up $1.43, or 0.6%, at $248.48, in early trading, and Qualcomm is up 11 cents at $62.60.

Micron's EPS going up

The good times just keep rolling for Micron Technology (MU). Analyst Weston Twigg with KeyBanc this morning reiterates an Overweight rating on the shares, and raises his price target to $65 from $53, after raising estimates for the company because it turns out NAND flash chips are "only peaking at 52% versus our prior expectations of 60%" in terms of bit growth, in Q2.

He is now modeling revenue for the year ending this August of $29.02 billion and EPS of $10.66, up from $28.48 billion and $10.15.

Note Susquehanna's Mehdi Hosseinilate yesterday wrote about Micron becoming an industry leader in lowering the "cost per bit" of manufacturing of NAND, which could help it take share.

Micron shares are up 72 cents, or 1.3%, at $54.69.

Goldman likes Microchip

Shares of Microchip Technology (MCHP), which last week announced it would buy fellow chip maker Microsemi (MSCC), are up $1.71, or 1.8%, at $97.28, after Goldman Sachs's Mark Delaney this morning raised his rating on the shares to Buy from Neutral, writing that there's lots to like about the stock even before a deal.

Among the things should consider, he writes, is the prospect of buybacks that will offset "below-seasonal revenue assumptions" the latter half of this year, and the fact its stock "trades in line with its historical average" valuation, even though the company made positive comments about its book-to-bill.

And for the deal, Delaney thinks it could be "16% to 28% accretive to our calendar 2019 EPS" estimate.

Splunk's potential

Shares of Big Data and analytics tool maker Splunk (SPLK) are up $2.16, or 2%, at $107.81, after Argus Research's Joseph Bonner this morning raised his rating on the shares to Buy from Hold, and offered a $120 price target. He views the company as an "early stage data analytics company" that is expanding into new areas, such as "IT network security."

Bonner offers that the stock trades below its peers on valuation but "could quickly command a premium if revenue accelerates, or even slows more gradually." And though he is "loath to play M&A roulette, we believe that Splunk is exactly the kind of company that could become an acquisition target for a larger enterprise software firm."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.