Top AI Stock Moves This Week: Nvidia, Apple, AMD, Silicon Motion, and Baidu
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1. Nvidia Blackwell System Delays: Overblown Concerns, Says Evercore
Evercore ISI analysts advocate buying Nvidia (NASDAQ: NVDA) stock prior to its upcoming earnings report for the July quarter. They argue that fears surrounding potential delays in the Blackwell system's release are exaggerated.
Key Points:
- Strong Demand: Hyperscale capital expenditure (CapEx) increased by 20% quarter-on-quarter in Q2 2024.
- Future Outlook: Expected CapEx growth of 8% in Q3 and 10% in Q4.
- Historical Resilience: Past disruptions in 2008, 2022, and 2023 suggest only short-term drops of 5%-10%.
- Alternative Solutions: Current Hopper solutions would suffice even if Blackwell faces delays.
- Market Position: Nvidia is poised to capture up to 80% of the value in the parallel processing era.
- Long-Term Projection: Potential EPS of $10 by 2030 and a significant weighting in the S&P 500 Index.
Evercore has raised Nvidia's target price from $145 to $150, reinforcing its status as a top pick in the computing sector.
2. Apple's AI Potential: Already Priced In, Says MoffettNathanson
MoffettNathanson analysts have initiated coverage of Apple (NASDAQ: AAPL) with a Neutral rating and a price target of $211 per share, asserting that the tech giant's AI potential is already reflected in its stock price.
Key Points:
- Anticipated AI Strategy: Apple's AI plans were well-anticipated, particularly after the WWDC event.
- iPhone Upgrade Cycle: New AI functionality aims to drive iPhone upgrades, but this is already priced in.
- Hardware Requirements: Enhanced AI capabilities necessitate newer hardware, limiting immediate impact.
3. Edward Jones Initiates Coverage on AMD with a Buy Rating
Edward Jones analysts have launched coverage of Advanced Micro Devices (NASDAQ: AMD) with a Buy rating, adding the semiconductor giant to their Stock Focus List.
Key Points:
- Data Center Demand: Rising demand for data center infrastructure is expected to boost sales of GPUs and CPUs.
- Xilinx Acquisition: The integration of Xilinx adds new products and end-markets, with cross-selling opportunities estimated at $10 billion.
- PC Market Upgrade Cycle: The shift to AI-enabled PCs could further drive AMD's growth.
- Valuation: Current share price does not fully reflect AMD's growth potential, presenting an attractive investment opportunity.
4. BofA Double Downgrades Silicon Motion to Sell
Bank of America analysts have downgraded Silicon Motion Technology (NASDAQ: SIMO) from Buy to Underperform, citing limited growth prospects.
Key Points:
- Growth Concerns: Minimal top-line growth expected beyond Q2 2024.
- Low AI Exposure: Limited exposure to AI and enterprise SSD sectors, dominated by competitors like Samsung and SK Hynix.
- EPS Estimates: Reduced EPS estimates for the second half of 2024 and 2025 by approximately 20%.
- Price Objective: Lowered to $60 from $90.
5. Bernstein Downgrades Baidu to Market Perform
Bernstein analysts have downgraded Baidu (NASDAQ: BIDU) from Outperform to Market Perform, reducing the price target from $130 to $97.
Key Points:
- Earnings Report Impact: Increased disruption and reduced clarity on future prospects.
- Search Growth: Lowered Search growth expectations by 5 percentage points for the second half of 2024 and by 3 percentage points for 2025.
- AI Initiatives: Positive outlook on AI Cloud and Robotaxi, but insufficient to offset concerns about Search revival.
Analysis Breakdown:
- Nvidia's Blackwell Delays: Evercore believes Nvidia's stock fears are overblown due to strong demand and historical resilience, making it a solid buy.
- Apple's AI Potential: MoffettNathanson suggests Apple's AI capabilities are already factored into its stock price, recommending a Neutral stance.
- AMD's Growth Prospects: Edward Jones sees significant growth opportunities for AMD, especially with the integration of Xilinx and the rising demand for data centers.
- Silicon Motion's Downgrade: BofA downgrades Silicon Motion due to limited growth and low AI exposure, reducing its price objective significantly.
- Baidu's Downgrade: Bernstein downgrades Baidu due to expected disruptions and weaker Search growth, despite positive AI initiatives.
Impact on Your Finances:
- Invest in Nvidia: Consider buying Nvidia stock as it shows resilience and strong future demand.
- Hold Apple: Apple’s AI potential is already priced in; hold if you already own the stock.
- Buy AMD: AMD offers attractive growth prospects not fully reflected in its current price.
- Avoid Silicon Motion: Limited growth prospects and reduced earnings make it a less attractive investment.
- Caution with Baidu: Potential disruptions and weaker growth suggest a cautious approach.
Understanding these analyst moves can help you make informed decisions, potentially enhancing your investment portfolio's performance in the AI sector.