Even in today’s down market, shares of Palo Alto Networks (PANW, $166.75) are up nearly 2% and have hit a new all-time high at $169.84.

JMP Securities raises its price target to $210 from $200, saying it continues to believe the company can become the market share leader in network security over time.

Since the release of FQ3 earnings on Wednesday, the fiscal 2015 (July) consensus revenue estimate has advanced to $899.1 million (growth of 50.3%) from $880.6 million. The FY’16 consensus now stands at $1.21 billion (growth of 34.3%), up from $1.17 billion.

Palo Alto Networks is a holding in the Tech-Stock Prospector Small-Cap Portfolio, added in June 2013 when the stock was trading at $39.42.

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Deal talks between Intel (INTC, $34.40) and Altera (ALTR, $48.95) are in advanced stages, according to Financial Times. Sources says the price would be around $15 billion.

Altera shares today are up more than 4% on continued buyout speculation and have hit a new 52-week high at $50.10. The latest market cap is $14.75 billion.

Shares of Palo Alto Networks (PANW, $166.37) today gained 3.5% and hit a new all-time high at $169.84 following the release of FQ3 results. Revenue for the April quarter rose 55% to $234.2 million, above the consensus estimate of $223.2 million.

Oppenhiemer raises its Palo Alto price target to $180 from $175, calling out FQ3 billings growth of 56% as the fuel for outperformance. The company continues to benefit from strong demand for its high-end appliances (PA-7050 and 3060) and is seeing stellar growth in recurring subscription revenue (contributing to better margins), says OpCo.

Palo Alto Networks is a holding in the Tech-Stock Prospector Small-Cap Portfolio, added in June 2013 when the stock was trading at $39.42.

Palo Alto Networks (PANW, $166.89) shares today hit a new all-time high at $169.84, while the following names scored new 52-week highs:

*FireEye (FEYE, $46.68)—$46.83

*Fortinet (FTNT, $39.92)—$39.99

*Imperva (IMPV, 61.24)—$61.65

Goldman Sachs upgrades shares of data storage vendor Western Digital (WDC, $99.03) to ‘Buy’ and raises its price target to $122 from $106 because it believes concerns regarding the weak PC market are overdone. 

The stock is down from its 52-week high of $114.69 reached in December, but has rebounded from the April 1 low of $89.82. 

In the largest semi deal ever, Avago Technologies (AVGO, $141.49) has agreed to acquire Broadcom (BRCM, $57.15) for $37 billion via a combination of $17 billion in cash and $20 billion in stock.

The transaction would create a company with combined revenue of ~$15 billion. For 2015, Broadcom’s consensus revenue estimate is $8.59 billion. Avago is actually smaller, with revenue for fiscal 2015 (Oct.) expected to come in at $6.79 billion.

Broadcom shareholders, who will own ~32% of the combined company, can elect to receive $54.50 a share in cash, 0.4378 shares of a newly formed HoldCo or some combination.

Avago claims $750 million of projected annual cost synergies expected to be achieved within 18 months. The acquisition will immediately add to EPS and FCF, says Avago. The deal is expected to close by Q1 2016.

Shares of Avago Technologies (AVGO, $143.34) today are up more than 9% and have hit a new all-time high at $144.82 following a Dow Jones report this afternoon that the semiconductor company is in advanced talks to purchase wireless chipmaker Broadcom (BRCM, $56.40). 

Broadcom shares today are surging 19%+ on massive volume, pushing the market cap above $33 billion.

In the April 2015 issue (TSP #158), Tech-Stock Prospector subscribers were alerted to rising earnings estimates at Avago. Shares of Avago at the time were trading around $126.25.

Fortinet (FTNT, $39.18) announces the acquisition of Meru Networks (MERU, $1.60), a provider of enterprise WiFi networking solutions, for $1.63 a share in cash in a deal worth $44 million. 

Founded in 2002, Meru went public in 2010. The company has roughly 14,000 customers. For 2015, the consensus revenue estimate for Meru of $81.2 million represents a decline of 10%.

Fortinet CEO Ken Xie says:

The acquisition of Meru Networks maps to our overall security vision of combining network security with ubiquitous connectivity. We expect this to accelerate our innovation through the delivery of new solutions and services to help enterprises of all sizes deploy, manage and secure wired and wireless networks in a mobile era.

Fortinet today also announces the launch of its FortiGuard Mobile Security subscription service, which is designed to protect mobile devices across the enterprise, particularly in BYOD environments.

Following the release last night of strong FQ1 results, shares of Nimble Storage (NMBL, $26.42) this morning are up 4%. 

The stock is trying to push off of its 200-day moving average at $25.63. There is resistance at the February high of $27.61.

Revenue for the April quarter advanced 53% to $71.3 million, above the consensus estimate of $69.7 million. For FQ2, Nimble expects revenue of $77 million to $79 million, vs. the consensus of $77 million.

Morgan Stanley downgrades Check Point Software (CHKP, $85.78) to ‘Underweight’ with a price target of $73 because it sees risk to earnings growth as the firewall refresh cycle peaks, causing subscription revenue growth to slow and margins to decline. 

With a market cap of $15.7 billion, Check Point trades at 9.6 times the 2015 consensus revenue estimate of $1.62 billion. On the 2015 consensus EPS estimate of $3.99, the forward P/E is 21.5, 2.9x the expected growth rate.

Check Point shares this month hit a new 52-week high at $88.49.

Cowen lifts its Apple (AAPL, $129.24) price target to $140 from $135 based on a still-strong iPhone 6/6+ product cycle. 

The firm is now projecting roughly 50 million units for the June quarter and says initial indications suggest Apple is capable of delivering a similar number for the September quarter.

Looking ahead, Cowen sees a Watch refresh, larger-screen iPad and most new hardware incorporating leading-edge processors and a “taptic” force-touch controller.

Shares of security solutions vendor Qualys (QLYS, $39.68) today are showing relative strength in a tough market. The stock is consolidating after the big drop (to the May 12 low of $36.21) following the release of Q1 results. 

The 200-day moving average at $37.21 was successfully tested. Qualys shares last week rebounded to a high of $40.67.

JMP Securities upgrades Expedia (EXPE, $112.32) to ‘Outperform’ with a price target of $130 because it believes the company is building scale globally, gaining share, streamlining and making itself more profitable.

Last week, Expedia announced the sale of its 62.4% stake in Chinese online travel company eLong (LONG) for $671 million to four buyers based in China. The transaction closed on May 22.

EMC (EMC, $26.84) will acquire cloud-services provider Virtustream for $1.2 billion in cash. 

Founded in 2009, the privately held company helps enterprises migrate, run and manage mission-critical applications in the cloud. 

Virtustream will form EMC’s new managed cloud services business. The deal, set to close in Q3, is expected to have no material impact to 2015 results and add to revenue/earnings in 2016.

Goldman Sachs initiates coverage of RF chipmaker Qorvo (QRVO, $84.40) at ‘Buy’ with a price target of $98 based on the company’s growth prospects in the mobile and wireless infrastructure segments. 

Qorvo is the combination of RF Micro Devices and TriQuint Semiconductor; the $1.6-billion merger was completed at the start of this year.

Earlier this month, Qorvo reported fiscal Q4 (March) revenue rose 46% to $634.8 million, well ahead of the consensus estimate of $623.6 million, with EPS of $1.11 beating the consensus by 24 cents.

For fiscal Q1 (June), the company sees EPS of $1.00 to $1.10 (the consensus was 98 cents) on revenue of $660 million to $670 million, vs. the consensus at the time of $655.5 million.

Since the middle of March, the fiscal 2016 consensus EPS estimate has advanced to $5.03 from $4.80.

RBC Capital raises its Netflix (NFLX, $623.02) price target to $700 from $600, saying results from a recent proprietary survey came back positive in France and Germany, indicating the company has gained early traction in Europe. 

The firm also points out that the U.S. survey continues to show a satisfied customer base (including low churn levels) thanks in large part to Netflix original content.

Morgan Stanley raises its Apple (AAPL, $131.30) iPhone sales estimate for the June quarter to 50 million units from 46 million based on continued strong demand in China. 

Also, the firm is now more optimistic on the Watch following the launch, lifting its base-case forecast for the first 12 months to 36 million units from 30 million.

Cantor Fitzgerald downgrades enterprise storage vendor NetApp (NTAP, $31.05 pre market, -12.1%) to ‘Hold’ and reduces its price target to $35 from $43 following last night’s disappointing FQ4 (April) results and FQ1 outlook. 

Revenue in the April quarter declined 6% and missed the consensus estimate, while EPS of 65 cents fell short of the consensus by seven cents. 

For the June quarter, NetApp see EPS of 20 cents to 25 cents (well below the consensus of 60 cents) on revenue of $1.275 billion to $1.375 billion, below the consensus of $1.46 billion.

The firm says NetApp faces a combination of secular challenges in the storage market and product execution/transition issues, leaving the company vulnerable to customer retention problems and market share losses.

Evercore ISI starts FireEye (FEYE, $42.21) at ‘Buy’ with a price target of $50 based on strong billings and subscription revenue growth. 

The firm expects FireEye’s expanding customer base to lead to more follow-up security subscription sales over the next two years. 

Plus, FireEye still has a lot of room to build out its customer base at the high end, as the company’s penetration rate into the Global 2000 is approximately 30%, according to Evercore.

Needham initiates coverage of Workday (WDAY, $90.65) at ‘Buy’ with a price target of $107. The firm believes Workday has the triple combination that growth investors are seeking: a large addressable market, well-positioned products within an industry megatrend and a financial model yielding significant revenue visibility.

While admitting the current high valuation “assumes almost flawless near-term sales execution,” the firm says Workday is performing well within the strong HCM market, which creates a positive risk/reward scenario for investors “even though sales of the company’s financials platform remain limited.”

Workday reports fiscal Q1 (April) results next week.

Buyout talks involving Salesforce (CRM, $71.40) may have died down, according to research service DealReporter. The stock has pulled back on this report and is now off 1.9% for today’s session.

Salesforce reports fiscal Q1 (April) results tomorrow after the close.

Shares of Nimble Storage (NMBL, $25.94) have pushed above the 200-day moving average at $25.63. The RSI is rising from 68.2. 

There is resistance at the $26 level from the beginning of March. The February pivot high stands at $27.61.

For more on Nimble, see TechStock Radar—May 15, 2015.

Shares of security solutions vendor Fortinet (FTNT, $39.55) today rose 2.3% and hit a new all-time high at $39.73.

Fortinet is a long-term holding in the Tech-Stock Prospector Small-Cap Portfolio, added when the shares were trading at $20.75.

BofA/Merrill raises its Tableau Software (DATA, $110.09) price target to $135 from $120, saying the company will be a long-term secular winner in the BI/analytics market. The firm has increased confidence that Tableau has the ability to grow revenue 30% annually.

Tableau shares last week hit a new all-time high at $113.62.

Shares of Ambarella (AMBA, $79.86)—provider of low-power HD and Ultra HD video compression and image processing solutions—today gained 5.2% in heavy trading and hit a new all-time high at $79.97.

Ambarella’s products are used in a variety of professional and consumer applications—including sports cameras (GoPro is a major customer), wearable cameras (law enforcement is an emerging market), drones and IP-based security cameras.

The stock is up 24% since we profiled the company in the March 2015 issue of Tech-Stock Prospector (TSP #157).

Jefferies has become more optimistic on the semiconductor sector, upgrading the group to ‘Positive’ based on a steady demand environment. 

The firm sees the recent inventory correction and lower overall CapEx spending as two factors making the group more attractive.

Jefferies favors NXP Semiconductors (NXPI), Texas Instruments (TXN), AMD (AMD) and Microchip Technology (MCHP).

In Q1, Fidelity boosted its stake in Nimble Storage (NMBL, $25.08) by 58%, adding 2.92 million shares. The mutual-fund giant now owns 7.89 million shares. So far this year, Nimble stock has fallen 8.8%.

For 2015, the consensus revenue estimate of $329.1 million represents growth of 44.6%.

BofA/Merrill says Salesforce (CRM, $72.88) is on a path toward $10 billion in revenue in calendar 2017 and is capable of growing 20% annually thereafter.

On a standalone basis, the firm estimates Salesforce could be worth $60 billion (5x calendar 2018 revenue) in two years if it can keep the growth “humming.” The latest market cap is $47.7 billion.

BofA/Merrill’s longer-term valuation upside estimate is $100 billion (5x calendar 2020 revenue) by 2019 if Salesforce at that point looks capable of hitting its goal of $20 billion in revenue by 2020.

For our latest analysis on Salesforce as a potential M&A target, see the May 2015 issue of Tech-Stock Prospector.

Order the latest issue of TSP here for download to your Kindle or Kindle for iPad/iPhone reading app.

Shares of chipmakers Xilinx (XLNX, $45.21) and Maxim Integrated Products (MXIM, $34.32) jumped this afternoon on a report from Reuters saying Avago Technologies (AVGO, $126.64) contacted both companies about a potential takeover.

Avago could spend $10 billion+ on a potential deal, according to the Reuters report.

Latest market caps:

*AVGO: $32.5 billion

*XLNX: $11.8 billion

*MXIM: $9.7 billion

Shares of security solutions vendor Imperva (IMPV, $55.85) this morning hit a new 52-week high at $56.74 following price-target boosts at Piper Jaffray and RBC Capital.

For our latest analysis on Imperva, see the May 2015 issue of Tech-Stock Prospector. 

Order the latest issue of TSP here for download to your Kindle or Kindle for iPad/iPhone reading app.

After rising 5.2% yesterday on takeover speculation, FireEye (FEYE, $42.21 pre market, -2.8%) shares in pre-market trading are down nearly 3%. 

On the Cisco Systems (CSCO) FQ3 earnings call last night, CEO John Chambers dismissed chatter that the networking giant was pursuing a deal for the security vendor.

Shares of Qualcomm (QCOM, $70.34) today are up more than 2% and have pushed above the 50-day moving average of $69.03. The stock has rebounded nearly 13% from its February 2 low of $62.26.

The 200-day moving average continues to slope downward from $71.58.

Deutsche Bank upgrades Microsoft (MSFT, $47.35) to ‘Buy’ and raises its price target to $55 from $44, saying emerging positive catalysts (Azure and Office 365) are not being appreciated. 

The firm believes the main negative (weak PC market sentiment) is already priced into the stock at current levels.

Shares of ad-tech specialist Rubicon Project (RUBI, $18.04) today are gaining 5.7% and have retaken the 50-day moving average of $17.82. 

Coming off the 52-week high of $20.59 (set in February), the stock dipped to $16.57 in April. Trading sideways since then, the shares last week retested that low, falling to $16.32. Traders are now watching $18.68 on the upside.

The 200-day moving average is trending upward from $14.32.

AOL (AOL, $50.28 pre market, +18%) is being bought by Verizon Communications (VZ) for $50 a share in an all-cash deal valued at ~$4.4 billion. 

For Verizon, the goal is to increase its presence in online video and grab its share of the fast-growing digital ad market. 

Tim Armstrong will stay on to lead the AOL unit after the deal closes sometime this summer.

Shares of AOL are gaining 18% in pre-market trading.

SunTrust upgrades Zillow (Z, $98.60) to ‘Buy’ with a price target of $130 (up from $110) because it believes expectations have been lowered sufficiently for the company to return to beat-&-raise type quarters.

The firm says the long-term opportunity from the secular shift of real estate information/discovery online (mobile) and Zillow’s dominant market position are currently being under-appreciated on Wall Street.

SunTrust underscores that its upgrade is not predicated on Zillow’s Q1 earnings report out after the close tomorrow, saying: 

While we expect Zillow has prudently reset expectations already, our call is based on what we see as a large TAM and the company’s dominant positioning. 

For 2016, SunTrust raises its revenue estimate to $923 million from $899 million. The consensus estimate is $888 million.

Zillow shares this afternoon are up more than 6% on the upgrade. Earlier, the stock traded to a high of $100.57.

Canaccord Genuity lifts its Apple (AAPL, $126.23) price target by $5 to $160 because it believes a very strong iPhone 6 upgrade cycle should play out throughout calendar 2015. 

The firm expects continued strong replacement sales to existing iPhone users (only 20% of the iPhone installed base had upgraded to the latest release as of last quarter) and continued high-end smartphone market share gains for the larger-screen iPhone 6 handsets.

CyberArk Software (CYBR, $66.82), focused on protecting so-called privileged accounts inside the network perimeter, continues to deliver superior results, last night reporting Q1 revenue expanded 89% to $32.9 million, well above the consensus estimate of $26.7 million. License revenue surged 119% to $20 million (61% of total revenue).

For Q2, the company sees revenue of $31.5 million to $32.5 million, vs. the consensus of $30 million. 

New top-line guidance for 2015 of $136 million to $138 million (up from $127 million to $130 million previously) came in above the consensus of $133.6 million.

CyberArk shares today are gaining more than 8%. For more on the company, see TechStock Radar—May 7, 2014.

In December, we named CyberArk a TSP Tech Disruptor for 2015 when the stock was trading at $41.10 (see TSP #154).

Stifel raises its Tableau Software (DATA, $110.42) price target to $125 from $115 after the company last night reported Q1 revenue of $130.1 million (+75% y/y), well above the consensus estimate of $115.3 million. 

For Q2, revenue guidance of $135 million to $140 million topped the consensus of $130.9 million

Shares of Tableau Software, a provider of data visualization solutions, this morning are surging more than 13%. 

Tableau is a holding in the Tech-Stock Prospector Small-Cap Portfolio; it was added to the portfolio in April 2014 when the stock was trading at $63.38.

Goldman Sachs upgrades Alibaba (BABA, $86) to ‘Buy’ with a price target of $98, saying it has increased confidence in the e-commerce giant’s growth outlook and cost management following the release of fiscal Q4 (March) results. 

Alibaba had revenue of $2.81 billion (+44% y/y), above the consensus estimate of $2.72 billion. EPS of 48 cents topped the consensus by seven cents.

The firm likes that Alibaba offers direct exposure to more spending moving online and to mobile. 

Goldman believes the shares offer value following the recent period of underperformance. 

Yelp (YELP, $47.01) shares today closed up 23% after The WSJ reported the company is exploring a sale. The paper’s sources say Yelp has been in touch with potential buyers in recent weeks.

On April 30, Tech-Stock Prospector subscribers were alerted to Yelp’s buyout potential in Rob’s Journal:

Yelp shares this morning are down more than 18% on growth concerns following a miss-and-lower earnings report. The market cap has fallen to around $3.1 billion. If there is further weakness, the company would become a more compelling strategic buyout target. Yelp should be something Yahoo (YHOO) is looking at for M&A because the two would be a good fit based on the mobile/local ad focus.

Yesterday, Yelp shares hit a new 52-week low at $37.91. Today's intraday high was $48.73.

CyberArk (CYBR, $61.42), a provider of security solutions to protect critical assets inside the network perimeter, reports Q1 results after the close. 

The consensus estimates: EPS of five cents (guidance was four cents to six cents) on revenue of $26.7 million (guidance was $25.5 million to $26.5 million). The Street-high revenue estimate is $27.8 million.

When CyberArk reported Q4 results in February, it blew away the consensus estimates on both the top and bottom lines, with revenue of $36.3 million beating the consensus by a whopping 35%. The stock surged 14.9% the day after the earnings release. 

On February 20, CyberArk shares hit a new all-time high at $70.48. So far this year, the stock is up 55%.

Shares of Marketo (MKTO, $28.77) are trying to make it back above the 200-day moving average at $30.07. 

The stock has rallied nicely from its April 1 low of $24.70, but hit some short-term resistance at $29.77. The 50-day moving average has begun to trend upward from $27.14.

For more on Marketo, see TechStock Radar—May 1, 2015.

Traders are keeping a close eye on Facebook (FB, $78.35) shares now that they’ve pulled back to the 200-day moving average at $77.36. 

The stock today rebounded back above the average after dipping to $77.05 and taking out yesterday’s low of $77.22.

On CNBC this morning, Nomura’s Rick Sherlund said he thinks Microsoft (MSFT) is far less likely to be an acquirer of Salesforce (CRM, $72.75) than Oracle (ORCL). 

Oracle has excess sales capacity that could be put to work selling Salesforce offerings, making it a better strategic buyer, according to Sherlund. 

Sherlund suspects Oracle was the original company to approach Salesforce.

He said any deal would probably be valued at around 8x revenue. Salesforce shares now trade at ~7x the fiscal 2016 (Jan.) consensus revenue estimate of $6.51 billion. 

It could end up being just a lot of chatter, with no deal ever taking place.

Goldman Sachs downgrades AOL (AOL, $40.04) to ‘Sell’ and trims its price target to $38 from $44 because of increased competition in automated advertising technology (particularly from Facebook). 

The firm also cautions that new content/video platforms are gaining popularity (particularly Snapchat, BuzzFeed and Vice Media), a trend that could result in AOL online/mobile properties losing share.

Baird ugrades Qualys (QLYS, $38.43) to ‘Outperform’ with a price target of $50 because it believes the company’s long-term growth prospects remain promising thanks to newly developed security products (including the Cloud Agent Platform) and others in the pipeline. 

Qualys’ reduced top-line guidance for 2015, the cause of today’s 30% pullback in the stock, was due to slight growth deceleration in Q1 within the core vulnerability management business (accounting for 79% of total revenue).

Shares of Yahoo (YHOO, $41.34) have slipped below recent support at $41.80.  The RSI is down to 29.5. The 50-day moving average is poised to dip below the 200-day moving average.

The culprit: Alibaba (BABA, $79.01) shares this morning hit a new post-IPO low at $78.81.

BofA/Merrill upgrades Netflix (NFLX, $554.90) to ‘Buy’ from ‘Sell’ and hikes its price target to $722, saying the company’s growing portfolio of quality original content gives its increased confidence in long-term subscriber growth and earnings power.

The firm believes content superiority is helping Netflix attract new U.S. subscribers and keep older ones happy (reduced churn), extending the saturation point. It also sees content fueling an enormous international opportunity.

Stifel upgrades Twitter (TWTR, $38.70) to ‘Neutral’ from ‘Sell’ following the recent sharp pullback in the shares. 

While the firm still believes Twitter stock is overvalued compared to the company’s growth profile, it now sees a few things that the market could interpret as positive catalysts, including a potential management shake-up and more product changes.

As for the product, Stifel says: “We don’t think much has changed and we are skeptical that much will change.”

Chuck Robbins has been appointed the new CEO of Cisco Systems (CSCO, $29.13) effective July 26. At Cisco since 1997, Robbins most recently served as senior VP of worldwide operations, leading the company’s global sales and partner team. He helped build Cisco’s partner program, now worth more than $40 billion in annual revenue.

Current CEO John Chambers will remain on the BoD and assume the role of executive chairman.

Bernstein starts Marketo (MKTO, $29.37) at ‘Outperform’ with a price target of $40, saying the company—a pure-play SaaS vendor in digital marketing—is expected to continue to grow rapidly and improve margins.

The firm says digital marketing represents a $20-billion market opportunity, with extremely low penetration of potential customers. 

Bernstein looks for Marketo’s integrated cloud-based platform to gain share as the overall market expands over the next three years.

Marketo shares today are up more than 3%.

Topeka Capital boosts its FireEye (FEYE, $43.71) price target to $56 from $45 based on strong demand for the company’s security solutions (Q1 billings rose 53%) and raised revenue/billings guidance for the year. 

The company now expects 2015 revenue of $615 million to $635 million, above the previous guidance range of $605 million to $625 million and the consensus estimate of $619.8 million.

Stifel maintains its ‘Buy’ rating on LinkedIn (LNKD, $201.35 pre market, -20.1%), but lowers its price target to $250 from $300, saying last night’s revenue guidance reset to the downside is being interpreted too negatively by the market. 

The firm calls LinkedIn a sustainable and dominant franchise that is being woven into the fabric of daily professional lives. 

Stifle says LinkedIn is unfairly being placed in the same social networking bucket as Twitter (TWTR), which it believes has characteristics of a fad product platform that could be replaced by other more innovative players. 

Cantor Fitzgerald reduces its LinkedIn (LNKD, $201.35 pre market, -20.1%) price target to $245 from $280 following last night’s weaker than expected guidance. 

However, the firm maintains its ‘Buy’ rating because it remains positive on the company’s long-term outlook based on the uniqueness of the franchise and large addressable market.