Analyst Moves in Artificial Intelligence (AI)

Nvidia Stock New Top Pick at Mizuho for November

Mizuho has named Nvidia (NASDAQ:NVDA) as its top pick for November, citing its strong leadership in the AI and data center markets. The firm reiterated an Outperform rating and set a price target of $140, highlighting Nvidia's dominance in AI training and inference chips with over 95% market share in data centers. Mizuho anticipates a 74% compound annual growth rate in the data center AI chip market, which could exceed $400 billion by 2027, driven by Nvidia’s advanced product lineup, including the H200, GB200, and GB300 chips set for rollout in 2024 and 2025. Nvidia’s Grace CPU and NVL36/72 servers are also expected to enhance content growth within AI servers.

Additionally, Nvidia continues to excel in gaming, commanding a 75% market share in PC gaming GPUs. Mizuho sees greater growth potential, stating, "We believe headwinds from China AI chip restrictions remain muted." An upcoming upgrade cycle with the RTX 50-series may enable Nvidia to achieve over $10 billion in annual gaming revenue, as current RTX 40-series penetration stands at around 10% of the PC market. Mizuho asserts Nvidia’s competitive edge over rivals AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC), expecting Nvidia to maintain its lead due to significant performance improvements from its Blackwell architecture.

Trump Win Bullish for Big Tech: Wedbush

Wedbush analysts expect a bullish response from tech stocks following Donald Trump’s presidential victory, particularly if Republicans dominate Congress. They believe a Trump administration will prioritize AI initiatives, benefiting major tech firms like Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Google (NASDAQ:GOOGL). These initiatives may significantly uplift AI-focused companies, such as Palantir, especially in government contexts like the Department of Defense.

A potential departure of Lina Khan from the Federal Trade Commission (FTC) could further aid tech companies by reducing scrutiny on major players. Analysts argue that Elon Musk’s support for Trump could expedite this change. While anti-trust issues persist, especially regarding Google and Apple (NASDAQ:AAPL), the exit of Khan might sweeten the environment for Big Tech. Analysts also contend that Tesla (NASDAQ:TSLA) stands to gain under a Trump win, despite possible setbacks for the EV sector.

JPMorgan Cuts SMCI to Sell

JPMorgan downgraded Super Micro Computer (NASDAQ:SMCI) from Neutral to Underweight, lowering the price target from $50 to $23 due to uncertainties regarding the company’s fundamentals and financial reporting. Concerns include a lack of transparency around auditor disagreements and management commitment, alongside delays in appointing a new auditor which may prolong compliance issues with the SEC.

Furthermore, there’s a noted slowdown in demand for Super Micro's Hopper-based servers as clients wait for Blackwell-based products, likely leading to potential price reductions in a competitive environment. Analysts also flagged the company’s $5 billion inventory as a risk if demand continues to wane.

Broadcom Could Grow AI Revenues at 35% CAGR, Says BofA

Bank of America (BofA) analysts predict significant growth for Broadcom (NASDAQ:AVGO) in AI-related revenues, estimating a 30-35% CAGR over the coming years. The firm reaffirmed a Buy rating despite lowering its fiscal 2025 earnings forecast due to seasonal headwinds.

BofA remains optimistic, projecting new AI contracts and partnerships, especially with Apple, to drive up earnings per share to $7.31 by 2026. The analysts view Broadcom’s strategic position in AI and its partnerships, including with OpenAI, as key to continued growth in AI networking solutions. They expect AI revenue to comprise over 30% of Broadcom’s current sales by fiscal 2026.

Argus Downgrades Palantir Stock on Valuation Concerns

Argus analysts downgraded Palantir Technologies Inc (NYSE:PLTR) from Buy to Hold, expressing concerns that the stock's surge may exceed its fundamentals. While Palantir achieved strong third-quarter results with rising revenue and margins, analysts pointed out that shares may now be overvalued after nearly tripling this year.

Palantir targets a niche market, traditionally serving US defense needs while expanding into the commercial sector, where it confronts complex IT challenges. Although the government sector is projected to continue growing, analysts highlight that commercial business will be crucial for future advances. As with other software firms, Palantir increasingly relies on AI applications for growth. Despite the downgrade, the outlook on long-term potential remains positive.