Evercore ISI analysts have recently recommended buying Nvidia stock, expressing confidence in the chipmaker’s upcoming earnings report for the July quarter. Despite concerns about potential delays in the release of the Blackwell system, Evercore believes that these worries are overstated. The investment bank pointed out the strong demand for Nvidia’s systems, with a significant increase in hyperscale capital expenditure during Q2 2024. Looking ahead, CapEx is expected to continue growing in Q3 and Q4. Although there were rumors of delays in the Blackwell system, Evercore analysts highlighted Nvidia’s history of quickly developing alternative solutions in the face of disruptions. They remain optimistic about Nvidia’s future prospects, projecting significant earnings per share by 2030 and suggesting that the stock could become a sizable portion of the S&P 500 Index.
MoffettNathanson, in a note to clients, acknowledged Apple’s strong AI strategy but indicated that the market has already factored in these developments into the stock price. While Apple is poised to excel in AI, the firm believes that this potential is already priced in. Despite earlier concerns about Apple lagging in AI, market confidence has remained strong, especially after the World Wide Developers Conference where Apple confirmed its AI plans. MoffettNathanson emphasized the importance of Apple’s focus on user trust and highlighted the impact of the new AI functionality on driving an iPhone upgrade cycle. However, the firm believes that the market has already priced in the potential benefits of this cycle, limiting the upside for the stock.
Edward Jones initiated research coverage of Advanced Micro Devices (AMD) with a Buy rating, citing multiple catalysts that could drive significant growth for the semiconductor giant. The firm sees increasing demand for data center infrastructure as a key driver of AMD’s future sales, particularly for its GPUs and CPUs. Additionally, AMD’s acquisition of Xilinx is expected to create cross-selling opportunities and further support the company’s growth. Edward Jones believes that the positive outlook for AMD is not fully reflected in the current share price, presenting an attractive investment opportunity for investors.
Shares of Silicon Motion Technology (SIMO) fell following a double downgrade by Bank of America analysts. The analysts expressed concerns about limited growth prospects for SIMO, particularly in the AI and enterprise SSD sectors. With expectations of minimal top-line growth beyond the first half of 2024, BofA has lowered its price target for SIMO and reduced EPS estimates for the coming years. The investment bank highlighted the company’s reliance on controller IC chips for NAND products as a key factor contributing to its limited growth potential.
Bernstein analysts downgraded Baidu from Outperform to Market Perform, citing increasing disruptions and reduced clarity on future prospects. With expectations of Search growth falling short of previous estimates, the firm believes that Baidu’s stock may trade sideways in the near future. Despite positive initiatives in AI Cloud and Robotaxi, Bernstein analysts are cautious about the stock’s performance due to the lack of revival in the Search segment.
Overall, the AI sector continues to experience significant movements based on analyst recommendations and market expectations. Investors should closely monitor these developments and consider the potential implications for individual companies within the AI space.