Wall Street predicts these 3 large-cap tech stocks to plunge more than 16%
The growing expansion of data centers, the deployment of 5G and the continued digital transformation are fueling the growth of the technology industry. However, the pandemic-induced tech boom now appears to be slowing and the industry is facing issues such as a semiconductor chip shortage and supply chain disruptions. Against this backdrop, Wall Street analysts expect Cloudflare (NET), Asana (ASAN) and ASE Technology (ASX) to dip into prices in the near term. So, let’s discuss these names.
Shutterstock.com – StockNews
The continued spread of COVID-19 is expected to continue to drive demand for technology products and solutions. In addition, increased spending on analytical capacity building makes the prospects for the technology sector bright. According to a Forrester report, the U.S. technology spending is expected to grow 6% in 2021 and 6.8% in 2022. In addition, the expansion of data centers, the deployment of 5G, business automation and remote lifestyles are also driving the growth of the technology market.
However, the pandemic-induced tech boom is gradually slowing down and many companies in the industry are facing production delays due to semiconductor chip shortages and supply chain disruptions. In addition, some industry players are struggling to stay afloat due to increasingly intense competition for market share.
Therefore, Wall Street analysts expect the stock prices of the fundamentally weak large-cap stocks Cloudflare, Inc. (REPORT), Asana, Inc. (ASAN) and ASE Technology Holding Co., Ltd. (ASX) drop by more than 16% in the short term.
Cloudflare, Inc. (REPORT)
NET is a San Francisco-based cloud service provider that provides a range of network services to businesses around the world. The company provides an integrated, cloud-based security solution that includes software applications as a service. Application security and application performance are the product categories of the company. NET has a market capitalization of $ 64.35 billion.
NET’s revenue for the third quarter, ended September 30, 2021, increased 51% year-over-year to $ 172.35 million. However, the company’s total Operating Expenses was up 48.8% from its value a year ago to $ 161.32 million. Its operating loss increased 24.7% from the previous year quarter to $ 26.49 million. And the company’s net loss increased 305.5% year-on-year to $ 107.34 million.
NET EPS is expected to decline 100% in the current quarter and 50% in the next quarter. Closing the last trading session at $ 201.09, the average analyst price target of $ 153.82 for its stock represents a potential decrease of 23.5%.
Asana, Inc. (ASAN)
With a market capitalization of 24.21 Billion, ASAN is a work management platform that enables individuals, team leaders and executives to organize work from day-to-day tasks to cross-functional strategic initiatives. The San Francisco-based company allows its users to communicate, monitor status, and oversee work between projects for real-time insight. ASAN provides various features on its platform, including timeline, application integration, automation, and other features.
In its fiscal second quarter, ended July 31, 2021, ASAN’s revenue grew 72% year-over-year to $ 89.48 million. However, the company’s total operating expenses rose 77.7% from its value a year ago to $ 139.66 million. Its operating loss increased 78.8% from the previous year quarter to $ 60.05 million, and the net loss increased 66.5% year-on-year to $ 68.36 million. of dollars.
ASAN’s EPS is expected to decline 22.7% in the next quarter. Its share price has fallen 3% in the past five days. A consensus price target of $ 110.4 represents a potential decrease of 16.2% from the last closing price of $ 131.67.
ASE Technology Holding Co., Ltd. (ASX)
Based in Kaohsiung, Taiwan, ASX is a semiconductor manufacturing service provider for assembly and testing. The company offers complete turnkey solutions for front end engineering testing, wafer probing, integrated circuit packaging, system, board level integration and electronic manufacturing services (EMS). ASX provides its services to the United States, Taiwan, the rest of Asia, Europe and internationally. The company has a market capitalization of $ 15.61 billion.
During the third quarter, ended September 30, 2021, ASX’s total net revenues increased 22.3% year-on-year to NT $ 150.67 billion ($ 5.4 billion). However, the company’s total operating expenses increased 16.8% from its value a year ago to NT $ 12.36 billion ($ 443.28 million). In addition, the company’s total operating expenses in the EMS segment increased 14.3% from the previous year quarter to NT $ 3.23 billion ($ 115.68 million).
ASX stock has fallen 23.5% in the past three months and 9.2% in the past six months. Closing its last trading session at $ 7.22, the average analyst price target of $ 4.13 represents a potential decrease of 42.8%.
NET stock was trading at $ 202.80 per share on Friday morning, up $ 1.71 (+ 0.85%). Year-to-date, NET has gained 166.88%, compared to a 27.00% increase in the benchmark S&P 500 over the same period.
About the Author: Priyanka Mandal
Priyanka is an avid investment analyst and financial journalist. After get a master’s degree in economics, her interest in financial markets motivated her to start her career in investment research.
The post office Wall Street predicts these 3 large-cap tech stocks to plunge more than 16% appeared first on StockNews.com