‘Stay Invested With Caution’: J.P. Morgan Stays Constructive on Markets – Picks 2 ‘Strong Buy’ Tech Stocks
After a full month of open war in the Middle East, the impact on energy markets is hard to ignore. Oil prices are up about 45%, adding to concerns that higher energy costs could push inflation higher. Meanwhile, the S&P 500 is down nearly 8% over the past month.
End of Quarter Sale - 50% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Against that backdrop, J.P. Morgan strategist Fabio Bassi has trimmed his 2026 year-end S&P 500 target to 7,200 (from 7,500). Yet, even after the cut, it still implies a new record high and 13.5% upside from here.
“We maintain the view of a resilient business cycle into year end; however, we are turning more cautious short term given the supply shock and the potential transmission into the growth outlook and earnings. Geopolitical concerns and higher energy prices for longer will drag global growth lower and inflation higher. We recommend investors to stay invested with downside hedges in equities, and we hold to these hedges given the modest correction year-to-date,” Bassi opined.
Following from this general stance, JPM analysts are pointing to two tech stocks to buy for investors who are constructive on the markets. According to TipRanks’ database, both boast Strong Buy ratings, and JPM’s latest commentary helps explain the thesis behind each. Let’s dive in.
Seagate Technology (STX)
We’ll start in the world of memory chips, where Seagate focuses on memory and data. Seagate’s focus on memory chips, and its long reputation for quality in the field – it released the first 5.25-inch hard drive disk back in 1980 – naturally put the company in a sound position to benefit from the AI-fueled expansion of the data center industry. Seagate’s stock price reflects that; the company’s shares are up by 327% over the past year, and the company’s market cap stands at just under $83 billion.
Currently, Seagate’s product lines lean heavily to high-density memory hardware, including such items as 32-terabyte hard drives, terabyte-range expansion desktops and SSDs, and high-capacity external hard drives. Seagate can supply memory chips and tools for almost every conceivable need, and its HDDs and SSDs are in high demand. Among the applications for Seagate’s memory and drive units: enterprise storage, gaming, personal backup, and even the surveillance field.
AI and cloud computing put a high premium on memory capacity, and Seagate is one of the direct beneficiaries of that. The company’s memory solutions are applicable to the ‘big data’ industry, particularly in data centers, high-performance computing, and the rising ‘storage-as-a-service’ field. Seagate has products that meet the needs of private and public clouds, as well as multicloud computing environments. Among the company’s important customers are such names as AWS and IBM.
We last saw financial results from Seagate in January, covering fiscal 2Q26. In that quarter, Seagate’s revenue of $2.83 billion beat the forecast by $80 million and was up 21.5% from the prior year. The company’s bottom line earnings, reported as a non-GAAP EPS of $3.11, were 27 cents per share ahead of the estimates.
For JPM’s Samik Chatterjee, an analyst rated by TipRanks among the top 1% of Wall Street’s stock analysts, the key here is the upside potential in this memory chip company. The 5-star analyst writes, “We see significant upside to estimates from current levels with the HDD industry positioned to benefit both from strong demand stemming from hyperscaler capex plans as well as pricing tailwinds. The HDD market remains an oligopoly with two large players in Seagate and Western Digital, and both have committed to remaining disciplined in relation to the addition of unit capacity and instead address the demand for higher exabytes primarily through transition to higher capacity drives. Our financial forecasts imply upside to calendar 2027 consensus estimates with further opportunity for upside from a stronger pricing environment than the stable to modest increases embedded in our financial forecasts. We also see greater upside to consensus in the out-years on the sustainability of the capex cycle and demand drivers.”
Chatterjee rates STX shares as Overweight (i.e., Buy), and gives the stock a $525 price target that suggests it will gain 45% in the next 12 months. (To watch Chatterjee’s track record, click here)
The 17 recent analyst reviews here include 13 Buys and 4 Holds, for a Strong Buy consensus rating. The stock’s $362.43 trading price and $458.31 average target price together indicate a 26.5% upside potential by this time next year. (See STX stock forecast)
Oracle (ORCL)
Next on our list, Oracle, is a $402 billion giant of the software industry. While Oracle is not in the same league as the multi-trillion-dollar industry leaders – Apple, Alphabet, and Microsoft – it still ranks as the fourth largest among US software companies. Oracle has been in business since the 70s, saw the start of the personal computing industry, and has been a big name in software since.
In recent years, Oracle has moved heavily into AI and cloud computing. The company offers services in cloud infrastructure and is in the process of building what will become the world’s largest AI-capable cloud: a 1.2 billion watt data center in Texas that will feature 500,000 Nvidia GPUs. Currently, Oracle is already known for its multicloud AI database, available around the world and working with such major names as Amazon, Google, and Microsoft.
Oracle’s cloud systems support most of the well-known AI models, including ChatGPT, Gemini, and Grok. Users can access multimodal AI models and can develop reasoning based on public databases. Oracle’s cloud systems are available as infrastructure for major cloud providers, offering secure data and network traffic behind firewalls. And, Oracle offers all of this in industry-specific applications, for everything from the automotive and banking sectors to retail and utilities.
In the company’s last quarterly report, for fiscal 3Q26, Oracle showed a top line of $17.2 billion. This total was up 22% year-over-year, and it beat the forecast by $280 million. At the bottom line, Oracle reported a non-GAAP EPS of $1.79, for a 21% year-over-year gain – and for a 10-cent per share beat compared to the estimates. The company stated that it was the first quarter in more than 15 to see total revenue and non-GAAP earnings both post 20%-plus year-over-year growth.
Mark Murphy covers this stock for JPM, and he sees the company in a solid position to maintain its strong results. Murphy writes, “We think the presence of a resilient, sticky, and largely recurring revenue stream with relatively low viability risk (compared to airlines, hotels, energy, restaurants, retailers, etc.) positions Oracle well to relatively outperform in a post-pandemic environment and AI focused environment. Key considerations: 1) Oracle should continue to benefit from a favorable mix shift in the business (Cloud Apps, OCI, and Strategic hardware are growing faster and becoming a larger portion of the business, while declining businesses become a smaller portion); 2) >70% of Oracle’s total revenue today is recurring/renewable (including maintenance), adding resiliency to the model; 3) continued discipline in operating expenses could continue to drive operating profit growth over time. Our sense is that the risk-reward dynamic is currently attractive.”
Looking ahead, the analyst puts an Overweight (i.e., Buy) rating on the shares and sets a $210 one-year price target that implies a 51% upside heading into 2027. (To watch Murphy’s track record, click here)
Oracle’s Strong Buy consensus rating is based on 31 recent analyst reviews that break down to 27 Buys and 4 Holds. The shares are currently trading for $138.80, and their $245.11 average target price indicates room for a 77% gain on the one-year horizon. (See ORCL stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
