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Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
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Microsoft Corporation (NASDAQ:MSFT) unveiled a series of new AI products at its Ignite conference. Among the notable announcements are AI Copilots for Azure and Service.
The Redmond-based tech titan is also working on internally designed semiconductors tailored for both AI and general-purpose workloads.
“Microsoft continues to be a first mover in bringing generative AI to customers, and the progress highlighted at Ignite today affirms our outlook that the company can continue to capitalize on the expanding opportunity it has in front of them,” Barclays analysts said.
NVIDIA Corporation (NASDAQ:NVDA) announced the new HGX H200 AI accelerator, which is an upgrade to the current H100.
Bank of America analysts reiterated a Top Pick designation on Nvidia stock following the announcement. They highlight that H200 is compatible with its predecessor H100 installations, enabling faster time to market.
“We view [this] as critical, as hyperscalers do not need to invest to reconfigure their existing hardware platform, incentivizing customers to remain key partners of NVDA,” analysts wrote.
Morgan Stanley analysts discussed potential GenAI winners in 2024 with Meta Platforms Inc (NASDAQ:META) seen as a strong mega-cap candidate.
“We continue to follow the multi-year phasing of investing in tech cycles (semi-conductors, infrastructure, then software) but in ’24 we look for more investor focus on material incremental ROIC of AI investments. META screens the most likely candidate among the mega caps.”
Elsewhere, the analysts also flagged several smaller stocks, including Snap (NYSE: SNAP), Pinterest (NYSE: NYSE:PINS), eBay (NASDAQ: NASDAQ:EBAY), Etsy (NASDAQ: NASDAQ:ETSY), Trade Desk (NASDAQ: NASDAQ:TTD), Take Two (NASDAQ: TTWO), and ridesharing-delivery businesses like Uber (NYSE: NYSE:UBER), DoorDash (NASDAQ: NASDAQ:DASH), and Lyft (NASDAQ: NASDAQ:LYFT).
MongoDB (NASDAQ:MDB) is the best way to play AI, according to Wells Fargo analysts.
The analysts initiated research coverage on MongoDB with an Overweight rating and a $500 per share price target.
“We see MongoDB as the best AI play in software infrastructure given its ever-expanding list of new workloads. The company is well-positioned for solid margin expansion, which in turn will drive strong Free Cash Flow growth,” analysts said in a note.
Wedbush tech analysts argue that a new tech bull market has started despite investor worries about stretched valuations. They see the set-up in the sector as strong amid a "tidal wave" of AI spending.
"Heading into 2024 we believe the tech sector is set up for an acceleration of spending around cloud and AI spending that we believe is being significantly underestimated by the Street," analysts commented.
"While IT budgets are expected to be up modestly in 2024, we believe cloud and AI driven spending will be up 20%-25% over the next year with use cases now exploding across the enterprise and consumer landscape."
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