Investing.com – Here are the analysts’ biggest artificial intelligence (AI) moves this week.
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Apple’s emphasis on artificial intelligence is ‘clearly visible’ – BofA
During the week, analysts at Bank of America Securities reiterated a Buy rating and a $230 price target.
The move comes after Apple (NASDAQ:) held its highly anticipated iPad event, which BofA said showed the tech giant’s focus on artificial intelligence was “clearly visible.”
Analysts say Apple continues to impress with its hardware, especially its innovation in silicon technology, with the introduction of the new M4 chip in the iPad Pro.
The M4 chip’s advanced Neural Engine enables “AI-enabled functionality” such as extracting objects from the background in 4K video using Apple’s Final Cut Pro.
It also allows document detection, uses artificial intelligence to rearrange frames, and removes shadows from images. Additionally, new iPadOS features offer improvements such as visual search, live text, and topic boosting.
“No changes to our estimates or price targets. Maintain GenAI’s beneficiary position at the forefront given GM’s growth potential and service sector dynamics,” BofA wrote.
Baird Upgrades Micron Shares to Buy
Baird analysts shared the latest findings from their semiconductor industry research earlier this week.
The most significant change is the upgrade of Micron (NASDAQ:), which moved the company’s stock from Neutral to Outperform.
The investment firm said it sees significant growth potential for the largest U.S. memory chip maker, whose products are critical to building extremely demanding artificial intelligence models.
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“While we’re a little late for the train, we see significant upside opportunities for Micron, especially given the recent stock pullback, which is counter to the gradually increasing positive trends unfolding in DRAM according to our recent channel checks, which gives a somewhat unprecedented outlook for memory next year. 12-18 months,” say Baird analysts.
Baird emphasized that DRAM prices are exceeding channel expectations, with industry-wide supply growth expected to slow to single digits in the second half of 2024 compared to the previous quarter, due in part to a capacity shift toward high-bandwidth memory ability (HBM). Analysts foresee a new supercycle for HBM that will offer Micron significant gross margin potential similar to NAND’s early growth.
“Micron has the potential to generate more than 60% gross profit from HBM3E production, and the transition from 8H to 12H later this calendar year will result in increased yields. Micron has the potential to capture high single-digit HBM market share post-C2024,” the analysts said.
RBC is optimistic about ServiceNow after analyst day
Cloud and artificial intelligence software maker ServiceNow (NYSE:) held a financial analyst day in Las Vegas on Monday, receiving mostly positive reactions from analysts.
In a research note, RBC Capital expressed a more bullish view of the company’s potential, emphasizing that generative AI capabilities “should be embedded in every workflow, in every product, across every industry.”
“The company has done a good job of providing additional and early context on Pro Plus’s adoption capabilities, while innovation and platform expansion likely points to additional significant opportunities, including in the front office space,” RBC said.
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Looking ahead, ServiceNow remains “one of GenAI’s best monetization opportunities and one of our best ideas,” the firm’s analysts said.
In a separate note, Morgan Stanley analysts said Analyst Day effectively demonstrated the essence of NOW’s long-term investment thesis. In particular, the Wall Street giant highlighted the company’s expanding capabilities, its efficient use of those capabilities and the division’s best-in-class economics.
Citi Increases Palantir Shares But Remains Cautious
Palantir Technologies (NYSE:) raised its full-year forecast Monday after reporting quarterly revenue that beat Wall Street expectations, helped by new contracts as artificial intelligence continues to grow.
Despite this, the forecast remained below Wall Street forecasts, causing the company’s shares to plummet the next day.
Despite this, Citi Research analysts remain cautiously optimistic about the artificial intelligence software company.
“PLTR’s first-quarter results, which are always a wealth of unique numbers, showed strong growth potential in both revenue and earnings, with slight upward revisions to full-year targets,” they said.
“The company’s new customer acquisition momentum continued with a record number of new clients, while growth in commercial transaction values was also very strong. The main weaknesses of the quarter were weaker collections with billings growth of just +2% and weaker 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 as we expect greater confidence in the sustainability of growth + Monetization A.I.P.”
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Test: Roblox is “a standout player 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 narrowly missed Visible Alpha’s estimate of $806.2 million.
However, revenue grew 22% year-over-year from $655.3 million recorded in the first quarter of 2023.
Ahead of the report, Benchmark analysts in a research note forecast continued earnings growth gains driven by tight cost controls, which should translate into significant operating leverage and improved cash flow.
“Roblox is opening up a promising new growth opportunity with the introduction of advertising on its platform this year. The move is expected to be successful given the company’s innovative approach and large user base,” Benchmark analysts said.
In terms of artificial intelligence, Roblox uses emerging technology to improve platform security, reduce costs with effective moderation tools, and support developers with content creation features such as automatic avatar customization and a texture generator that improve the quality and quantity of games, Benchmark highlighted.
Moreover, real-time chat translation using artificial intelligence expands global access. The firm considers Roblox a “preeminent player” in the AI-powered landscape, saying “substantial evidence shows that AI tools can speed up online bookings, improve security and trust, and reduce costs.”