Berenberg yesterday warned that Samsung’s smartphone growth is peaking, Apple’s success in tablets is slowing and BlackBerry’s new focus on enterprise is too late to save it. Britain’s biggest tech giant, the FTSE 100-listed Arm, is one of the few firms that it praised for not having been inflated by the hype.
The Cambridge processor designer’s royalties are expected to continue to increase as smartphone and tablet volumes soar over the next few years. Arm is one of the few tech stocks that Berenberg holds a buy valuation for, with a 46 per cent implied upside.
While the high current tech stock valuations was not likely to plummet as sharply as they did in the early 2000s, Berenberg said it believed some of the biggest names in tech would suffer when the expected bubble bursts.
“Our analysis suggests that, like the AOL-Time Warner deal in January 2000, the WhatsApp-Facebook deal earlier this year coincided with the technology market peaking,” Berenberg analyst Adnaan Ahmad said in the note. “The impending pipeline of initial public offerings/mergers and acquisitions that we have projected based on venture capital financing flows suggests that we are not far away from this final phase of the bubble.”