After a dismal 2022, Wall Street is bullish on some technology company stocks this year. The tech sector was hit hard last year as worries about economic weakness and the Federal Reserve’s aggressive rate hike path to tame inflation weighed on companies. In particular, rising interest rates hurt the present value of the future stream of earnings for tech stocks. The tech-heavy Nasdaq Composite slumped 33% last year, falling more than the S & P 500 and the Dow Jones Industrial Average. The Technology Select Sector SPDR Fund (XLK), a fund that corresponds with the tech sector of the S & P 500, dropped 28% in 2022. Still, there are some bright spots in the sector where Wall Street analysts see growth ahead. To identify what technology stocks may outperform in 2023, CNBC Pro used FactSet data to look at members of the Technology Select Sector SPDR ETF and sorted for those with buy ratings from at least 60% of analysts. Then, CNBC filtered for the companies that have a 20% or more upside to the consensus price target for a list of 14 technology names poised to gain in the coming year. The tech names Wall Street is bullish on The potential top performer on the list is an energy technology company, Enphase Energy . The stock gained nearly 45% in 2022 and could rise another 43% this year, according to the consensus price target from Wall Street analysts. Deutsche Bank in November initiated coverage of the stock with a buy rating and $330 price target, signaling a 43% increase from Tuesday’s close. The rating stems from the company’s position to take advantage of a growing solar energy market in the U.S., according to analyst Corinne Blanchard. SolarEdge Technologies , also an energy tech name, is on the list as well. Analysts see it gaining more than 26% in the coming year. ServiceNow is second on the list, with 77% of analysts rating the company a buy and the consensus price target expecting a gain of more than 37% this year. In a Nov. 17 note, Morgan Stanley named ServiceNow its top pick in the software sector. “Transition from System of Record in IT to System of Action bridging multiple systems across the enterprise significantly broadens the growth opportunity, and along with best-in-class unit economics, underpins our confidence in durable 30%+ FCF growth in FY23/FY24,” wrote analyst Keith Weiss. Similar stocks on the list include Salesforce , Fortinet and Tyler Technologies , which analysts see surging more than 28%, 36% and 33%, respectively. CNBC’s analysis also highlighted a few payments companies, as well. Of these names, analysts see the highest potential gain from PayPal , slated to surge more than 35% this year. In September, Raymond James said that it expects a 30% surge from PayPal and that it’s a stock investors should want to own it heading into a weak economic environment. That’s because the company has made necessary changes in recent quarters to perform solidly going forward, according to analyst John Davis. Global Payments is another payment name on the list. Wall Street sees it gaining more than 33% next year. Some of the final names in the group include Microsoft and Intuit, which analysts see increasing more than 25% and more than 21% this year, respectively. Both stocks slumped in the technology rout in 2022 but are now trading at more attractive levels for investors to jump in and ride any wave back up. — CNBC’s Michael Bloom contributed to this report.
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