Jefferies unveils five preferred tech stocks in wake of August reporting season

Jefferies has singled out five favored names in the technology, media, and telecommunications (TMT) arena after the August 2026 earnings period, focusing on companies with resilient balance sheets and the ability to enforce pricing even as the macroeconomic outlook remains uncertain.

The investment firm's preferred choices are Carsales.com (ASX:CAR), REA Group (ASX:REA), Megaport (ASX:MP1), Infratil (NZX:IFT), and Life360 (ASX:360). Jefferies said that Megaport and Life360 have been oversold, representing a buying opportunity.

Carsales.com receives a buy rating with a price target of $33.50. The firm noted that selling pressure stemming from the stock's removal from the MSCI index has ended. In Australia, the company can still exert pricing power given healthy dealer profitability. Its U.S. division is now highly diversified and can generate growth under any economic conditions. In Brazil, competitor iCarros is going through an ownership transition, giving Webmotors an opening to win market share. The stock trades at a price-to-earnings multiple of 22.

REA Group is rated buy with a price target of $195.00. Jefferies believes the company can achieve double-digit yield growth in spite of a difficult housing market. The Luxe add-on is exceeding expectations, and sellers are unlikely to downgrade their listings because REA provides better leads than Domain. The stock sits close to its price-to-earnings trough from 2019.

Megaport has a buy rating and a $26.00 price target. Demand for compute and storage remains solid, while GPU rental prices are moving higher. Jefferies views Nvidia's decision to pause support for neocloud startups as beneficial for Megaport. The company has enough liquidity to meet its committed capital expenditure in fiscal 2027, with an additional $500 million in headroom. The core network business is showing organic annual recurring revenue growth of 24% year over year.

Infratil is rated buy with a price target of NZ$17.70. The stock trades at a 20% discount to net asset value. CDC, which represents 49% of Infratil's valuation, has more than 800 megawatts coming online by fiscal 2029 and a further 2.6-gigawatt pipeline. One NZ contributes 15% of valuation and continues to generate cash.

Life360 receives a buy rating with price targets of $61.00 for its U.S. shares and $29.00 for its Australian shares. Jefferies expects the fourth quarter to be stronger, underpinned by advertising, monthly active user growth, and price increases. Sensor Tower data for August shows continued growth in monthly active users.

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