Apple shares should jump by more than a third as the technology giant is posed to take advantage of the long-term changes in the industry such as the shift to tablet computers, Goldman Sachs said in a note Monday.
"Our 12-month price target of $430 implies 34 percent upside. We believe that Apple's gross margins have bottomed, and that a bevy of product releases in the first half of 2011 will serve as key catalysts for the stock," Goldman said.
Goldman said EMC shares were also a "buy" with a price target of $27, a rise of 22 percent, but other technology firms were not as well positioned.
"We are most bullish on Buy-rated Apple and EMC, and we are least constructive on Sell-rated Dell and Hewlett-Packard," the note said.
Goldman said it was positive on the outlook for the tablet market, but negative on the traditional PC market outlook. This "secular" trend change will result in companies being individually judged instead of being impacted by overriding industry factors because some companies, such as Apple, are able to take advantage of the shift.
"The days of persistent cost-cutting may be coming to an end. Many of the more secularly challenged companies will be forced to substantially increase organic and inorganic investments in an attempt to adjust to the inevitable changes in the industry," the note said.
Goldman's price target for Xerox is now $12 per share, IBM is $150, Lexmark is $37, NetApp is $55, Seagate Technology is $16, Western Digital is $35, Dell is $10 and Hewlett-Packard is $38.