Investing.com – Here are the biggest artificial intelligence (AI) analyst moves this week.
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“AI-Powered Upgrade Is Coming:” Apple reiterates Bank of America’s “Top Pick” title
Bank of America reiterated Apple (NASDAQ:) stock as the top pick, maintaining a price target of $230.
In particular, the Wall Street giant's analysts are optimistic about Apple's transition from smartphones to “smartphones,” anticipating a significant multi-year upgrade cycle.
“We see that upcoming AI-enabled phones (IntelliPhones) will lead a multi-year upgrade cycle similar to the incremental function improvement resulting from the introduction of smartphones,” the note said.
The Bank of America team believes that with a broad base of more than four billion smartphones, the adoption of AI-enabled IntelliPhones will exceed the rapid adoption of smartphones and 5G networks.
IntelliPhones are expected to leverage advanced artificial intelligence and machine learning for features like super-personal assistance, language processing, health monitoring, enhanced photography, and AR/VR experiences, among others.
Needham downgrades UiPath stock
Needham analysts on Thursday downgraded UiPath (NYSE:) stock from buy to hold citing a mix of factors, including macroeconomic headwinds and a changing go-to-market (GTM) strategy.
“We downgraded PATH shares to Hold due to a combination of macro pressure, near-term execution uncertainty due to CEO change and changing GTM strategy, and year-over-year margin pressure creating an unfavorable near-term financial profile,” the analysts wrote. .
The investment firm noted that the company's 1Q25 sales metrics were somewhat disappointing, with larger deals facing increased scrutiny.
The last CEO changed back to founder Daniel Daines, following the departure of Rob Enslin, and GTM's multiple changes are expected to cause sales disruptions in the near term.
Both net new annual recurring revenue (ARR) and revenue guidance were lowered, which Needham believes is “conservative enough, but we believe it will take several quarters for the GTM changes to begin to yield meaningful upside to the guidance.”
Northland is increasing C3.ai's purchase price amid accelerating subscription growth
Enterprise AI company C3.ai (NYSE:) saw its shares upgraded by Northland analysts during the week from market perform to outperform, with a price target of $35.
Analysts highlighted the company's rising subscription growth in Q4 2024 as a key factor behind the upward revision.
“C3.ai posted accelerated subscription growth to 41% in 4Q24, providing evidence that headwinds from the migration to a usage-based revenue model are subsiding,” the analysts commented.
They added that looking ahead, strong trial expansion and demand for generative artificial intelligence (genAI) point to continued high growth.
Mizuho raises price targets for chip stocks as AI moves to the edge
Japanese investment banking and securities firm Mizuho raised its price targets on several chipmakers this week, including Micron Technology (NASDAQ:), Qualcomm (NASDAQ:), Seagate Technology PLC (NASDAQ:), and Western Digital (Nasdaq:).
The move comes as Mizuho analysts believe the next catalyst for AI will be at the edge, as original equipment manufacturers (OEMs) enhance on-device AI capabilities for phones and PCs.
The company reiterated its buy ratings, raising its price target to $240 for Micron, $155 for Qualcomm, $90 for Seagate, and $110 for Western Digital.
Analysts highlighted Qualcomm's ramp-up of AI-enabled PCs with Snapdragon
Furthermore, AI-powered computers, which require 40% to 80% more DRAM, and phones requiring 50% to 100% more DRAM, provide wind Background for micron. Western Digital and Micron are also expected to benefit from higher NAND content in AI devices with improved pricing.
Meanwhile, Seagate has higher PC storage content and increased cloud capital spending. Mizuho expects 1 billion AI smartphones to be shipped from 2024 to 2027, with AI PCs making up up to 60% of the PC market by 2027.
Dell is a “legitimate participant in GenAI,” says Loop Capital
In a new note to clients, analysts at Loop Capital reiterated a Buy rating on Dell Technologies (NYSE:) shares and raised their price target from $125 to $185, emphasizing that the IT company “is progressing as a legitimate participant in GenAI.”
“Dell continues to show legitimate GenAI progress over the past 90 days that looks like it could progress through CY2025,” Loop analysts stated.
The investment bank noted Dell's superior position on long-term business IT budget share, noting the company's growing capabilities across infrastructure products, services and finance.
Dell identified a $2 to $3 attached revenue opportunity in services, networking, and storage for every $1 of GenAI server revenue.
“In terms of storage specifically, there has been a suggestion in our work that for AI generation (non-hyper-) commercial storage, after VAST Data and WEKA, DELL storage could be as well positioned as PSTG and NTAP, if not better positioned,” he said. Analysts wrote.
Analysts also highlighted that Dell pre-purchased over $7 billion worth of NVIDIA (NASDAQ:) GPUs, increasing the stock significantly in the last 90 days. Dell expects to secure $10-15 billion worth of GPUs over the next six quarters, in line with its potential generative AI revenue of $9-10 billion in 2024 and perhaps $15 billion in 2025.
Current guidance for Geneative AI server revenue in 2024 is approximately $5 billion. Despite a slight decline in PC shipments and a 200 basis point market share decline, Dell's exposure to the core commercial market is expected to grow in late 2024 and 2025.
