Wedbush Adds Alphabet Stock To Best Ideas List: What You Need To Know

Wedbush Securities updated its coverage of a handful of top tech stocks on Wednesday.

The Tech Analysts: Wedbush analysts Michael Pachter and Ygal Arounian assumed coverage of the following stocks:

• Overstock.com Inc OSTK initiated at Outperform with a price target lowered from $100 to $95. 
• Facebook, Inc FB initiated with a Neutral rating and price target lowered from $375 to $340. 
• Twitter Inc TWTR initiated with a Neutral rating and price target raised from $56.50 to $75. 
• Alphabet, Inc. GOOG GOOGL with an Outperform rating and price target lifted from $2,470 to $2,953. 
• Snap Inc SNAP: upgraded from Neutral to Outperform, price target raised from $52 to $75.

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The Tech Takeaways: Arounian said he is optimistic about Twitter’s outlook, but much of its progress in product development is already priced into the stock at current levels.

“We like Twitter’s efforts to improve development velocity, and opportunity from new product services, but believe upside on user growth and revenue product is now priced into shares,” the analyst said. 

For Facebook, Arounian said the company remains a leader in the high-growth social commerce market, but regulatory risk remains an overhang for the stock.

“While we do expect continued strength in those areas, a rebound in the overall ad market, and a continued shift towards integrating commerce into the platform, but are also balanced by our view that Facebook is the most exposed to privacy risks, particularly around Apple’s App Tracking Transparency (ATT) efforts that will limit the Identifier for Advertisers, or IDFA,” he said. 

Pachter is bullish on Overstock and said the company is well-positioned to generate double-digit revenue growth.

“Over the course of the next 24 months, we expect to see meaningful contribution from the planned expansion into Canada and from increased traction of sales to the General Services Administration (Federal) and to state and local governments,” the analyst said. 

Finally, Pachter added Google parent company Alphabet to Wedbush’s Best Ideas List and said the company has multiple bullish catalysts on the horizon.

“Alphabet is well positioned in a number of key areas across its businesses that we think can sustain overall growth in its core ad business, drive long-term sustainable top-line growth in its burgeoning Cloud business, and also lead to improving margins in Cloud, which can materially improve Alphabet’s overall EBITDA and margins, well ahead of Street estimates in the coming years,” he said. 

Benzinga’s Take: All four of the tech stocks mentioned have outperformed the S&P 500 in the past year, and that momentum has continued so far in 2021.

As long as investors continue to have an appetite for growth, traders can expect more upside from these stocks in the months ahead.