Investing.com – Here are the biggest artificial intelligence (AI) analyst moves this week.
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Truist says Microsoft is “the best way to power AI in our coverage.”
Microsoft (NASDAQ:) remains “the best way to operationalize AI in our coverage,” Truist Securities analysts said in a note this week.
“We believe many of the key themes driving the business under the hood at Microsoft point to key trends in both our infrastructure and security coverage,” the company says.
“In particular, we see the company’s cutting-edge AI strategy driving a leadership position in the software industry.”
Although there will ultimately be many winners in the field of generative AI models, OpenAI is the clear leader in the LLM space, analysts said.
They emphasize that the leadership advantage in enterprise AI applications will be permanent due to the great attention paid to architecture and governance decisions.
Analysts still believe that the partnership between Microsoft and OpenAI will bring additional benefits to MSFT compared to other cloud providers.
Palantir lowered its rating to sell on Monnes, Crespi and Hardt
Moness, Crespi & Hart analysts downgraded their rating Palantir Technologies Inc (NYSE:) from Neutral to Sell, setting a price target of $20.
PLTR shares fell nearly 5% after the market opened on Friday.
This decision comes on the heels of a disappointing earnings season for enterprise software and the failure of the 18-month generative AI hype cycle to generate significant revenues for most players in the industry. Analysts noted that the market is likely to shy away from software stocks with excessive valuations.
“After rising 167% in 2023, Palantir stock was already rich entering 2024, and with a 49% rise since the beginning of the year, we believe valuation has now reached its limit,” they wrote.
While Monis believes Palantir remains well-positioned to benefit from the AI trend and volatile geopolitics in the long term, the company notes that the stock’s current valuation has reached extreme levels.
Combined with software industry pressures and erratic revenues from government contracts, “the darkest days of this economic quagmire lie ahead,” analysts said.
Bernstein raises price target on AAPL: Apple ‘can be a leader in AI, not a laggard’
Investment firm Bernstein raised its price target on Apple (NASDAQ:) stock, expressing confidence that investors now see that the iPhone maker “can be a leader in AI, not a laggard.”
The 12-month price target was increased from $195 to $240, suggesting an upside of ~15% from current levels.
Bernstein analysts noted that with more than 1 billion customers compared to ChatGPT’s 100 million, Apple has great potential to bring AI to a broad audience, improving everyday utility. Remarkably, Apple does not pay for ChatGPT, “highlighting the power it has.”
Bernstein also said investors are becoming more optimistic about the upcoming iPhone 16, anticipating a strong product cycle, in part because AI features will only be available on the iPhone 15 Pro and higher models.
“Although we are increasingly convinced that Apple will benefit from AI, we see a risk that the benefits may take longer to materialize than some bulls seem to suggest,” the analysts warned.
“Many Apple Intelligence features will be rolled out over the next year and will only work in English, which could push some upgrades into the iPhone 17 cycle,” they added.
Wedbush raises Micron PT value to $170 ahead of earnings report
Earlier in the week, Wedbush Securities analysts reiterated a buy rating on memory chip maker Micron Technology Inc (NASDAQ:) and raised their price target from $130 to $170, ahead of the company’s earnings report next week.
“From our perspective, the key question with MU is that history suggests the stock is expensive relative to asset levels,” the company’s analysts noted.
Analysts acknowledge that although memory is still a cyclical industry, they believe it will remain in short supply through this year and likely most of 2025. This is due to a lack of new investment in NAND and DDR5, and partly due to increasing capacity requirements for high-end memory. High bandwidth. (HBM).
“As such, we believe average selling prices (ASPs), revenues, margins, and earnings per share are all headed higher, with book also rising as foreign cash flows flow onto MU’s balance sheet,” they noted.
“Net, we expect only positive news for MU’s financials for some time to come, and we expect the stock to continue to rise until we see a change in investment plans in the industry.”
Rosenblatt: Adeia is “the most underrated AI game on the market”
Intellectual property (IP) licensing company Adeia Inc (NASDAQ:) is “the most undervalued AI company on the market,” Rosenblatt Securities said, reiterating a buy rating on its stock.
After discussions with Adeia’s CEO, CFO, and Vice President of Investor Relations, Rosenblatt emphasized the company’s status as “under the radar” despite its leadership in key AI growth sectors.
The company’s analysts highlighted the huge opportunity in the semiconductor field, noting that the limitations imposed on the transistor are what bring Moore’s Law to an end. “Adeia’s hybrid interconnect and IP chiplet offer a solution” to these challenges, they noted.
In the media sector, Rosenblatt recognized Adeia as a “leading digital entertainment IP company,” positioning it well for the continued rise of cross-device video.
On the financial front, Rosenblatt praised Adeia’s “over 60% operating margin” and its valuation.
“We consider Adeia to be the most undervalued AI toy on the market,” they asserted. “We recommend investors take a deeper look at the company.”