Buy Apple, reduce Nvidia ahead of GTC event By

© Reuters — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

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Buy Apple ahead of GTC event, trim Nvidia – Lynx analyst

In a Friday note to clients, a Lynx Equity Strategies analyst advocated for buying Apple shares (NASDAQ:) and reducing Nvidia (NASDAQ:) holdings before the latter’s GPU Technology Conference (GTC) event later this month.

He argues that for AI to be universally adopted, major players like Apple and Google (NASDAQ:) must be involved, challenging the view of using them merely as funding sources for investing in current AI winners like Nvidia and AMD (NASDAQ:).

He emphasizes that the AI revolution requires the involvement of tech giants like Apple and Google to achieve global scale.

“Perhaps they are behind that ball. If so, are investors willing to bet that AI could make real traction in global applications powered on by just one hyperscale cloud provider – MSFT?” the analyst wrote.

“The AI revolution is upon us, for sure. It will become part of our daily lives. We are merely pointing out the inconvenience of the time and resources it takes to take the revolution global.”

“The revolution simply cannot happen on a meaningful time scale without the participation of AAPL and GOOG. If they are laggards, so be it,” they added.

BofA analysts expect acceleration for Broadcom in 2H24

In the aftermath of its fiscal Q1 2024 report, Bank of America analysts reiterated a Buy rating and raised the price target from $1,500 to $1,680 for Broadcom (NASDAQ:).

The analysts believe that the first half of the year could be a trough for AVGO’s non-AI semiconductor sales, particularly in broadband.

Looking ahead, they expect these sales to pick up momentum in the second half, achieving double-digit growth by the end of the fourth quarter and continuing into the 2025 fiscal year.

“Meanwhile, we think AI sales (now over 30% of semis) could secularly grow at a 20-25% CAGR with more contribution from high-speed switches. VMWare looks to exit this year close to ~$4bn, suggesting >10% YoY growth trajectory into FY25,” analysts wrote in a note.

“We see Meta (NASDAQ:) as an important additional ASIC customer for AVGO, in addition to existing strong position at Google,” they added.

Melius Research raises estimates, PT for AMD

Although it’s been one of the more popular AI stock picks over the past year or so, analysts at Melius Research think AMD has more to offer.

The broker raised their estimates for the chipmaker, citing improving near-term and long-term prospects in data centers. The price target has also been increased from $192 to $265.

The introduction of AMD’s MI300X AI chip is expected to benefit considerably from the emerging “inferencing phase” of AI, which demands extensive high-bandwidth memory. This phase demands substantial high-bandwidth memory, which is anticipated to see a rising supply in every quarter of this year, Melius noted.

“With Microsoft (NASDAQ:) as an anchor – and other clouds now picking up – AMD can generate more upside in AI vs. prior estimates (we already raised 2x in 2024),” its analysts said.

“Checks also indicate that traditional server CPU sales are improving with better fundamentals and solid execution. Reiterate Buy Rating,” they added.

Mizuho hikes price targets for ARM, NVDA, AMD, and AVGO

On Wednesday, analysts at Mizuho Securities adopted a longer-term perspective on the AI and custom silicon landscape, highlighting Arm’s expansion into the Mobile and Data Center (Infrastructure) sectors.

Despite Arm’s impressive performance post-IPO, analysts believe the chipmaker’s stock has more growth potential. As such, Mizuho raised their price target for ARM to $160 from $100, indicating an approximate 20% rise from current levels, “given further custom silicon/mobile upside,” said analysts.

“While ARM has a lockup expiration coming up 3/12, we continue to see strategic investors continuing to own ARM given its attractive long-term roadmap,” Mizuho wrote.

Simultaneously, the broker also upped its price targets for Nvidia, Broadcom, and AMD, to $1,000, $1,550, and $235, respectively.

“NVDA remains the biggest near-term AI winner, with AMD and AVGO also major beneficiaries,” analysts said.

Palantir’s AIP platform is ‘launching pad of AI use cases’ – Wedbush

Wedbush analyst increased their price target for Palantir (NYSE:) to $35 from $30 earlier in the week.

They said the latest evaluations of the big data analytics software maker have turned increasingly positive amid beliefs that the company’s Artificial Intelligence Platform (AIP) foundation “is becoming viewed by many US enterprises as the “launching pad of AI use cases”,” the analyst wrote in the note.

“With the AI Revolution now quickly heading towards the key use case and deployment stage, Palantir with its flagship AIP platform and myriad of customer bootcamps is in the sweet spot to monetize a tidal wave of enterprise spend now quickly hitting the shores of the tech sector in our opinion,” they added.

Given its robust product lineup enhanced by AI capabilities, Palantir, also called “Messi of AI” at Wedbush, could secure a significant portion of the projected $1 trillion AI Global Total Addressable Market (TAM), the analyst noted.

This expectation is based on the rapid adoption by enterprise and government ecosystems seeking efficient platforms to automate intricate workflows.


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