Investing.com – Here are the biggest artificial intelligence (AI) analyst moves this week.
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Apple's focus on AI is 'clearly visible' – BofA
During the week, analysts at Bank of America Securities reiterated a buy rating and price target of $230.
The move came after Apple (NASDAQ:) held its long-awaited iPad event, which, according to Bank of America, showed that the tech giant's focus on artificial intelligence is “clearly visible.”
Analysts said that Apple continues to impress with its devices, especially with its innovations in silicon technology, as it introduces the new M4 chip in the iPad Pro.
The advanced neural engine inside the M4 chip enables “AI-enabled functions,” such as isolating subjects from backgrounds in 4K video using Apple’s Final Cut Pro.
It also allows document detection and uses AI to rearrange frames and remove shadows in images. Moreover, new features in iPadOS provide improvements such as visual search, live text, and topic optimization.
“No change to our estimates or price target. Keep buy on GenAI beneficiary on edge, with GM rally and momentum in services,” Bank of America wrote.
Baird upgrades Micron shares to Buy
Baird analysts shared the latest findings from their research on the semiconductor industry earlier in the week.
The most significant change is their rating upgrade for Micron (NASDAQ:), which moved the stock from neutral to outperform.
The investment firm said it sees significant upside potential for the largest U.S. memory chip maker, whose products are essential for running highly demanding artificial intelligence models.
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“While it's a bit late to catch the train, we see meaningful upside opportunities ahead for Micron particularly given the stock's recent pullback, in contrast to the increasingly positive trends unfolding in DRAM according to our recent channel scans, leading to a somewhat unprecedented memory outlook during The next period, Baird analysts said: “12 to 18 months.”
Bird highlighted that DRAM prices are exceeding channel expectations, with industry-wide supply growth expected to slow to low single digits on a quarterly basis in the second half of 2024, due in part to capacity shifts towards high-bandwidth memory (HBM). Analysts expect a new supercycle for HBM, providing significant gross margin potential for Micron similar to the early NAND ramp.
“Micron has the potential to generate gross margin in excess of 60% on HBM3E production, with a migration from 8H to 12H later this calendar year driving revenue growth. Micron has the potential to capture a high component market share,” analysts noted. of single digits in HBM coming out of C2024.
RBC is bullish on ServiceNow after Analyst Day
On Monday, cloud software and artificial intelligence maker ServiceNow (NYSE:) hosted a Financial Analyst Day in Las Vegas, getting a largely positive reaction from analysts.
In a research note, RBC Capital expressed a more optimistic view of the company's potential, emphasizing that generative AI functionality “should be integrated into every workflow in every product in every industry.”
“The company has done a good job of providing additional, early context around the opportunity around Pro Plus adoption while platform innovation and expansion likely signal significant additional opportunities to come, including around the front office,” RBC noted.
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Looking to the future, ServiceNow remains “one of the best companies to monetize GenAI and one of our best ideas,” the company's analysts emphasized.
In a separate note, Morgan Stanley analysts noted that the analyst day effectively presented the core of NOW's long-term investment thesis. Specifically, the Wall Street giant emphasized the company's growing opportunities, its effective execution in seizing these opportunities, and best-in-class unit economics.
Citi is boosting Palantir shares but maintaining a cautious stance
Palantir Technologies (NYSE:) raised its annual guidance on Monday after reporting quarterly revenue that beat Wall Street expectations, boosted by new contracts amid the ongoing rise in artificial intelligence.
Despite this, the guidance remained below Wall Street expectations, leading to a sharp decline in the company's shares the next day.
However, analysts at Citi Research maintained a cautiously optimistic outlook on the AI software company.
“In what is always a mass of unique metrics to unpack, PLTR's first-quarter results showed a strong uptrend on both the top and bottom lines with a slight upward revision to full-year targets,” they said.
“The company's new customer acquisition momentum continued with record new additions, while trade deal value growth was also good. The key results in the quarter were around weaker collections with billings growing just +2% and weak operating cash flow,” the analysts added.
The investment bank raised its 12-month price target from $23 to $25 but maintained a neutral rating on the stock, noting that it trades “at one of the highest EV/sales multiples in software, and we await further conviction in the durability of growth + monetization from AIP.” “
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Benchmark: Roblox is a “standout in the AI-driven environment”
Shares of video game developer Roblox (NYSE:) fell sharply on Thursday, after the company reported worse-than-expected first-quarter results and guidance.
The company's revenue of $801.3 million was only slightly below Visible Alpha's estimate of $806.2 million.
However, revenue was up 22% year-over-year from the $655.3 million reported in Q1 2023.
Prior to the report's release, Benchmark analysts, in a research note, forecast continued success in revenue growth driven by stringent cost controls, which should lead to significant operating leverage and increased cash flow.
“Roblox is embarking on a promising new growth opportunity by introducing advertising to its platform this year, a move that is expected to be successful given the company's innovative approach and large user base,” Benchmark analysts said.
In terms of AI, Roblox is leveraging burgeoning technology to improve platform integrity, reduce costs via effective moderation tools, and support developers with content creation features like Avatar Auto Setup and Texture Generator, which enhance game quality and quantity, Benchmark highlighted.
Moreover, AI-based real-time chat translations are expanding global reach. The company considers Roblox a “standout” in the AI-driven environment, noting that “substantial evidence shows that AI tools can accelerate net bookings, enhance safety and trust, and reduce expenses.”