Investing.com — This week’s biggest analyst moves in the field of artificial intelligence (AI) are as follows:
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Nvidia stock named Top Pick by Mizuho for November
Nvidia has been identified as Mizuho’s top pick for November, emphasizing the company’s strong presence in the AI and data center sectors.
Mizuho reaffirmed its Outperform rating and set a price target of $140, underlining Nvidia’s dominance in AI training and inference chips for data centers, where it holds over 95% of market share.
The firm foresees significant growth in the data center AI chip market, projecting a compound annual growth rate of 74% and a potential market size exceeding $400 billion by 2027. This growth is expected to be driven by Nvidia’s advanced product lineup and upcoming chips like the H200, GB200, and GB300 slated for release in 2024 and 2025.
Additionally, Nvidia’s Grace CPU and NVL36/72 servers are seen as growth catalysts in the AI server segment.
Apart from its data center prowess, Nvidia remains strong in the gaming market, holding an estimated 75% market share in PC gaming GPUs. Mizuho sees growth opportunities here, with potential for gaming revenue surpassing $10 billion annually.
Mizuho also notes Nvidia’s competitive edge over rivals AMD and Intel, expecting Nvidia to maintain its lead due to advancements in its Blackwell architecture.
Wedbush predicts bullish response to Trump win for Big Tech
Wedbush analysts anticipate a positive reaction from tech stocks to Donald Trump’s victory in the US presidential election, particularly if there is a “red sweep” in Congress.
The investment bank believes a Trump administration would highlight AI initiatives, benefiting tech giants like Microsoft, Amazon, and Google.
Wedbush suggests that government AI initiatives could boost firms like Palantir, and potential changes to the Inflation Reduction Act could benefit Big Tech.
The departure of Lina Khan from the FTC could also be advantageous for tech companies, potentially leading to increased deal activity in the industry.
Wedbush analysts believe Tesla and Elon Musk could benefit the most from a Trump victory, citing Tesla’s unique market position.
JPMorgan downgrades SMCI to Sell
JPMorgan downgraded Super Micro Computer from Neutral to Underweight, citing concerns over transparency, management, and business fundamentals.
The lack of transparency, management issues, and a slowdown in demand for current products are key factors behind the downgrade.
JPMorgan also raised concerns about inventory levels and gross margin sustainability for Super Micro.
Delays in next-generation products could impact the company’s competitive position in the AI server market.
BofA projects 35% CAGR growth for Broadcom in AI revenues
Bank of America analysts expect Broadcom to achieve strong growth in AI-related revenues, with a projected CAGR of 30-35% in the coming years.
Reiterating a Buy rating, BofA highlighted Broadcom’s strengths in AI compute and networking, as well as its solid free cash flow generation.
The bank adjusted its fiscal 2025 earnings forecast for Broadcom due to seasonal headwinds and a product transition involving Google’s TPU.
However, BofA believes new contracts and opportunities with Apple will offset these challenges.
Broadcom’s earnings per share (EPS) are projected to reach an adjusted $7.31 by 2026, driven by various factors. The company’s decision to return to quarterly guidance may bring attention to seasonal fluctuations and “lumpy AI shipment,” but BofA analysts are optimistic about Broadcom’s long-term AI prospects. They anticipate that AI-focused networking and custom chip sales could boost AI-related revenue from around 23-24% of current sales to over 30% by fiscal 2026. Additionally, BofA highlighted Broadcom’s strategic positioning in AI and partnerships with customers like OpenAI as potential growth drivers beyond 2026. As AI adoption accelerates, Broadcom’s focus on high-performance AI networking solutions, especially those complementing NVIDIA’s upcoming Blackwell architecture, is seen as essential in solidifying its industry role.
On the other hand, Argus analysts downgraded Palantir Technologies Inc from Buy to Hold due to concerns about valuation. Despite a strong third quarter performance with accelerated revenue growth and expanding margins, driven by core US government business and growth in the US commercial market, the stock’s significant rally this year raised apprehensions of being overvalued. Palantir’s business model, catering to clients with complex IT needs, can result in erratic financial outcomes, potentially leading to sharp market responses, especially for highly valued tech stocks like Palantir. While government contracts still contribute 55% of revenue, the commercial sector, particularly in the US, is seen as the future growth driver. Like other enterprise software companies, Palantir is increasingly relying on AI-powered applications for growth. Despite the downgrade, analysts maintain a positive long-term outlook on the company’s potential.