Amazon and other battered tech stocks to buy after an ugly October for the Nasdaq

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So far, October is shaping up just as we suspected it might: volatile, scary and brutal.

Investors in the Nasdaq can attest to that fact after the index received a drubbing in the first three weeks of the month that has thusly slashed nearly 7% from the tech-heavy benchmark.

So, is it time to throw in the towel? Not so fast, according to our call of the day from analysts at Piper Jaffray. The strategists make the case that now may be an opportune time to pick up big names that have been hard hit by the recent pullback that still leaves the Nasdaq Composite Index














COMP, +1.12%












 with a 8.43% year-to-date gain—but very badly bruised.

Kicking off that Piper list is Amazon.com














AMZN, +1.86%












Harsh V. Kumar, senior research analyst and the team, expect Amazon to report revenue and earnings above forecast when it delivers its quarterly results Oct. 25. Shares of the e-commerce giant have gained a whopping 79% so far this year, but have pulled back 11% in October.

“Our reformulated Amazon search index points to FXN online retail revenue growing 26.0% [year-over-year], above street estimates calling for 18.1%,” they said in a separate note, ahead of results due next Thursday.

And in-game content and growth—the “rising tide that lifts all ship”— is going to keep driving profits for Take-Two














TTWO, +0.41%












another big pick. Kumar says few investors have factored in potential popularity of Wild West adventure game “Red Dead Redemption 2.” Take-Two’s stock is down 8% this month so far, shares are up 21% for the year. Piper’s price target is $145.

Among chip makers, Piper Jaffray endorses the solid fundamentals at Broadcom














AVGO, +0.84%












 and believes that management will cut costs to deliver a fillip to shares of Microchip Technology














MCHP, +1.25%












Both stocks are pretty embattled this year, with Broadcom off 11% for 2018 thus far and around 8% for October, while Microchip is down 23%.

Here’s the rest of the list from those analysts. Under security, storage and networking, they like Proofpoint














PFPT, +0.06%












Nutanix 














NTNX, -2.93%












and Mellanox














MLNX, +1.20%












Enterprise software name picks are Salesforce














CRM, +0.76%












ServiceNow














NOW, -0.36%












and Twilio














TWLO, +0.82%












And for the Internet-of-things and optics category, Freestone Resources














FSNR, +0.00%












 and Impinj














PI, -1.31%












are a pair they say investors should revisit.

Here’s the chart that lays out Piper’s views:



And in case you’ve forgotten what day it is, Friday is the 31st anniversary of the biggest stock-crash in history. Columnist Mark Hulbert thinks another a one-day 5% or 10% plunge is totally on the cards. TGIF…

The market

The Dow














DJIA, +0.78%












 S&P














SPX, +0.92%












  and Nasdaq














COMP, +1.12%












  are all up in early action.

But Europe














SXXP, +0.21%












 is mostly a mess, with Italy budget problems back to haunt that market. Italian bond yields shot to fresh multiyear highs over those concerns.

China stocks














SHCOMP, +2.58%












 rebounded from Thursday’s huge rout, even after disappointing GDP. Helping out a bit, Chinese officials have been trying to calm investors, with banking and insurance regulatory chief Guo Shuqing talking up the country’s “stable financial system.”

Read: Here’s why investors are anxious about China’s next move

Gold














US:GCU8












and the dollar














DXY, -0.19%












are flat, and crude














US:CLU8












is modestly higher.

The chart

In a note to clients Thursday, JPMorgan Chase & Co. suggested investors hit up some big-name stocks primed for buybacks and made cheaper by the latest pullback. They estimate buyback activity for S&P 500 companies to come in at around $800 billion this year, and think that’s conservative.

Our chart of the day from the Daily Feather blog (h/t The Daily Shot) shows how some of the biggest spenders on buybacks are waaay behind on pension contributions.



It is worth noting that blogger The Fly did a deep dive on the subject earlier this week, referring to underfunded pensions by both companies and the government as a terrifying “red nightmare” hanging over markets. Check that out here.

The buzz

Honeywell














HON, +0.56%












and Procter & Gamble














PG, +8.47%












are up after results, SunTrust














STI, +2.86%












and State Street














STT, -9.40%












 are still to come. American Express














AXP, +3.62%












 is up a bit after beating forecasts, while PayPal














PYPL, +8.92%












 is seeing a bigger pop after better-than-expected results.

A Stifel downgrade isn’t doing eBay














EBAY, -8.37%












 any favors this morning.

SolarWinds














SWI, +0.00%












 priced its IPO at the lower end of a forecast range. Shares will start trading Friday.

Tesla














TSLA, +0.60%












 is up after CEO Elon Musk announced over Twitter a new and cheaper Model 3.

DowDuPont














DWDP, -0.50%












 is crawling back after a late plunge Thursday on news of a $4.6 billion impairment charge.

A U.S. official is asking the World Trade Organization to weigh in on a clash over metals tariffs after retaliatory moves by China, the EU, Canada and Mexico, who are expected to ask the same, says Reuters.

The Saudis may be ready to point the finger at a top Saudi general for the death of Jamal Khashoggi, to take huge global heat off the crown prince, says the NYT. The Saudis say they are conducting their own investigation.

Read: Trump praises Montana congressman who assaulted reporter

Existing home sales are the only data on tap for Friday, coming after the open.

Quote of the day

“When you look at last week, some of the selling is the result of programmatic selling, because as volatility goes up some of these algorithms force people to sell,” Goldman Sachs CEO David Solomon tells CNBC’s Wilfred Frost.

Random reads

Taliban insurgents killed a powerful Afghanistan leader, just missing a top U.S. commander

Nat. Sec. Advisor John Bolton and White House chief of staff John Kelly, got into a screaming match, say sources

Pope Francis has been invited to North Korea, and he’s thinking it over

Friday night’s Mega Millions jackpot drawing is up to nearly $1 billion

This apparent political ad has been raising eyebrows:

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