Arm Holdings Soars as Jefferies Expects AI Momentum to Continue
Arm Holdings, the UK-based chipmaker, has seen a 60% surge in its shares in the past week, following its impressive FQ3 results and guidance. Analysts at Jefferies have raised their forecasts on ARM and increased their target price to $115 from $98.
Jefferies analysts believe that ARM is well-positioned to benefit from the rising demand for edge AI devices, particularly premium smartphones. They expect royalty growth to accelerate due to a faster transition to devices using V9 architecture, which has double the royalty rates of V8. The analysts also note that AI is driving higher chip design activity, leading to higher licensing revenue for ARM.
Morgan Stanley Raises Estimates on Nvidia, Citing Strong Near-Term Outlook
NVIDIA Corporation, a key player in the AI industry, has seen its shares surge 50% since the start of the year. Despite this impressive growth, analysts at Morgan Stanley believe that there is more upside potential for NVDA.
The analysts have raised their estimates on the chipmaker, citing a “very strong near-term picture.” They remain confident in NVIDIA’s competitive position, even amidst growing enthusiasm for alternatives. While they expect a plateau in 2025, the analysts believe that NVIDIA will continue to experience strong growth in the long run, aided by positive cloud commentary.
Baidu Faces Make or Break Year, Say Bernstein Analysts
Chinese technology and AI giant Baidu Inc is facing a critical year, according to analysts at Bernstein. They state that Baidu needs to expand its AI capabilities while also dealing with increased competition from AI enhancements.
Analysts believe that there are three key aspects of Baidu’s AI strategy that investors should closely monitor. First, Baidu must secure additional ad revenue through search optimization and gain market share in a mature market. Secondly, the success of its revamped AI-integrated apps is crucial for increasing user engagement and transitioning to transaction-based monetization. Lastly, Baidu’s ability to maintain its lead in the cloud sector depends on the appeal of its AI developer platform to developers.
BofA Raises Palantir’s Target Price on Robust AI Demand
BofA Securities analysts have raised the target price on Palantir Technologies Inc from $21 to $24 and reiterated a Buy rating. The analysts point to the strong surge in US commercial sales and the addition of 40 new customers during the latest quarter as evidence of Palantir’s impressive growth.
Palantir’s AI platform is still in its infancy but is already making a meaningful impact. BofA analysts expect the momentum to continue, highlighting Palantir’s unique position as an enabler of AI-powered data-driven decision making. They also note the significant potential for growth within the US Government sector.
Citi Optimistic About Google’s Gemini Ultra, Raises Target Price
Google’s parent company Alphabet Inc has introduced its most advanced large language model yet, called Gemini Ultra. Citi analysts believe that this new model has multiple potential benefits, including an increase in product innovation, enhanced adoption of Google’s GenAI tools, and a more cohesive strategy across Google’s offerings.
As a result, Citi has reaffirmed its Buy rating on Alphabet and raised the target price to $168. Gemini Ultra is expected to contribute to improved search efficiency, more comprehensive results, and broader query responses.
The analyst moves mentioned above underscore the continued growth and potential of the AI industry, with companies like Arm Holdings, NVIDIA, Baidu, Palantir, and Alphabet at the forefront of AI innovation.
Analyst comment
Arm Holdings Soars as Jefferies Expects AI Momentum to Continue: Positive news. The market for Arm Holdings is expected to continue growing due to the rising demand for edge AI devices and increased chip design activity driven by AI. Expect strong royalty growth and higher licensing revenue for Arm.
Morgan Stanley Raises Estimates on Nvidia, Citing Strong Near-Term Outlook: Positive news. Nvidia is predicted to experience further growth in the near term with a strong competitive position and positive cloud commentary. Despite a plateau in 2025, long-term growth prospects remain strong.
Baidu Faces Make or Break Year, Say Bernstein Analysts: Negative news. Baidu is facing a challenging year with increased competition and the need to expand its AI capabilities. Investors should monitor its ability to secure additional ad revenue, increase user engagement, and maintain its lead in the cloud sector.
BofA Raises Palantir’s Target Price on Robust AI Demand: Positive news. Palantir’s impressive growth is expected to continue with its AI platform enabling data-driven decision making. Strong surge in US commercial sales and potential growth within the US Government sector contribute to the positive outlook.
Citi Optimistic About Google’s Gemini Ultra, Raises Target Price: Positive news. Google’s Gemini Ultra language model is expected to enhance product innovation, adoption of GenAI tools, and strategy coherence across Google’s offerings. Improved search efficiency and broader query responses are anticipated.
