Baird's Outlook for 2024: Apple may be overvalued, Snowflake, MongoDB, etc. are preferred stocks

Zhitong App has learned that investment bank Baird has listed Snowflake (SNOW.US), MongoDB (MDB.US), Dynatrace (DT.US), and Axon Enterprise (AXON.US) as the best software stocks this year. Baird stated that among communication software companies, Five9 (FIVN.US) is its top choice, while Zoom (ZM.US) is emphasized as a long-term value investment. Baird also mentioned that Apple's strong performance in 2023 has led to a significant increase in valuation, which may have resulted in the stock being overvalued. However, Baird remains optimistic about Apple in the long term. Looking ahead to the next year, Baird believes that technology stock investors need to pay attention to the following issues: Can IGV outperform the market again? The IGV technology software industry ETF rose by 59% last year, compared to a 24% increase in the S&P 500 index and a 43% increase in the Nasdaq Composite Index during the same period. What impact will the US election and Federal Reserve policies have? Analysts William Power and Yanni Samoilis stated, "Obviously, everyone is speculating about the election results." They believe that Bandwidth (BAND.US), which provides political information, should be a direct beneficiary of this election. Although the Federal Reserve's rate cuts should be beneficial for higher economic growth and higher valuations, this has largely been priced in. What is the outlook for generative artificial intelligence (AI)? Baird did not provide specific information about this disruptive technology, but the bank stated that Snowflake and MongoDB are considered the companies most likely to benefit. How is cloud optimization progressing? The continued slowdown in cloud computing spending may still be a negative factor, and Amazon's (AMZN.US) fourth-quarter performance will be a focus. What are the concerns for the future? Baird stated that the market's general expectations for Axon in 2024 are the most reasonable, while other companies face moderate risks. What is the outlook for unified communications stocks? Analysts stated that in the field of unified communications, the market will closely monitor the revenue improvement of companies such as Zoom, Twilio (TWLO.US), RingCentral (RNG.US), and DocuSign (DOCU.US). Will there be catalysts in the M&A field? Both Five9 and Docusign have had acquisition rumors in 2023. Baird expects more M&A activities in 2024. Is Axon poised for an upward trend? Among the stocks covered by Baird last year, Axon had the strongest growth in software business, with an expected 51% increase in software revenue to reach $556 million in 2023. Analysts stated, "We expect this to remain a key driving force in 2024." " How is Apple performing? Baird stated that it may be difficult for Apple to replicate last year's nearly 50% return rate. Analysts tend to believe that Apple's stock price will be weak, but due to Apple's products having the attributes of consumer goods, steady growth in the service business, and the potential of new products such as Vision Pro, the bank remains optimistic about Apple's long-term prospects.