Top tech analyst Mark Mahaney and his group at RBC Capital Markets released a note to investors Friday about their top takeaways from August's rally in the Valley.
The PowerShares QQQ, which tracks the top 100 stocks in the tech-heavy Nasdaq, was up almost 2 percent in a month that saw a slight drop for the Dow Jones industrial average and the S&P 500, and a bigger, 1.6 percent, decline for the small-stock Russell 2000.
But specifically, Mahaney's note focused on meetings with internet domain name leader GoDaddy, digital coupon company Quotient and payment processor Square – all finishing strong the last week of August.
The note identified GoDaddy's opportunity internationally. Right now the company has about 17 million customers, with an estimated 465 million small- and medium-sized businesses that could avail themselves of the company's services. Mahaney's conclusion, after talking to incoming CEO Scott Wagner, was that "management views themselves as needing to penetrate markets now more than expand."
The tech team at RBC also met with Square CFO Sarah Friar, and said their key takeaway was that "revenue margin trajectory looks sustainable."
Mahaney and his colleagues also met with Marc Andreessen at venture capital giant Andreessen Horowitz to look at the Silicon Valley landscape beyond the scope of publicly traded companies.
In their note to investors, RBC cited Andreessen's observation that in terms of private market valuations "they are not seeing the same levels of frothiness at later stage companies that they had seen historically." That's been a big concern for Wall Street over the years, casting doubt on the ability of some companies to provide shareholder value after going public.
The team at Andreessen Horowitz talked about some of the biggest players in the cloud market, saying Amazon Web Services, Google and Microsoft's cloud divisions are "becoming more comparable in terms of price and product offering." The VC firm is bullish on the entire cloud sector, predicting the market will see aggressive growth into the foreseeable future.
It's worth noting the SKYY First Trust Cloud Computing ETF, which has about $1 billion in assets, is up 20 percent so far this year.
Correction: This story was revised to correct that it was Marc Andreessen who said to keep an eye on the cloud.