5 big analyst AI moves: Chipmakers in focus once again

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5 big analyst AI moves: Chipmakers in focus once again
Credit: © Reuters.

Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

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Meta has ‘underappreciated AI assets’ - BofA

Bank of America (NYSE: BAC ) analysts reflected on the news that Meta Platforms Inc (NASDAQ: META ) is currently conducting trials of over 20 new GenAI features, focusing on search, chat, and messaging functionalities.

The upcoming features are anticipated to enhance Meta's AI personal assistant and text-to-image generation capabilities, making them more seamlessly integrated into the Meta ecosystem.

“We think AI announcements support our thesis that AI driven innovation at Meta will lead to new user experiences and recurring revenues models. With a massive capex budget, internal AI supercomputer, and inhouse LLM, we think Meta’s AI assets are underappreciated in the stock price,” analysts said.

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Nvidia is a new Top Pick at Piper Sandler

Piper Sandler made NVIDIA Corporation (NASDAQ: NVDA ) the broker’s new top large-cap pick.

Analysts said that valuation is “substantially more compelling than AMD” while Nvidia provides “the full stack of compute that allows for strong efficiencies and significant competitive advantages at the system level.”

“We think that software licenses can be a significant portion of overall revenue going forward and increase NVDA's TAM. While we feel that FY25 is not fully booked, we believe NVDA has good visibility into FY25 through strong backlog coupled with demand tailwinds. We also see a new China chip contributing to revenues by the April quarter in the range of $2.5B-$3B /quarter once fully ramped,” the analysts commented.

Gemini seen as a game-changer

Alphabet Inc Class A (NASDAQ: GOOGL ) rose on Thursday following the introduction of Gemini, the company's latest and most advanced AI model.

The positive market response indicates a reduction in concerns about Alphabet's position in the fiercely competitive artificial intelligence market. Gemini, available in three sizes—Ultra, Pro, and Nano—offers various capabilities, including efficient on-device tasks and deployment across Google products such as Gmail, YouTube, and Docs.

“We view this as the culmination of Alphabet's year of major AI announcements… But this likely does not change the narrative until investors see how AI influences growth and profitability (which we believe will take time),” KeyBanc analysts wrote.

Positive reactions to AMD’s event

Advanced Micro Devices Inc (NASDAQ: AMD ) rallied sharply on Thursday following the introduction of new accelerator chips designed to compete in the thriving AI market, where Nvidia currently holds a dominant position.

AMD highlighted the superior performance of its accelerator chips, claiming they can execute AI software at a faster pace than existing rival products.

“We believe investors are still looking to play AMD’s AI story given a perception of lower risk vs NVDA (though mostly because the numbers are so much smaller),” Bernstein analysts said.

Rising adoption of AI bots fuels Verint’s EPS beat

Verint Systems Inc (NASDAQ: VRNT ) added as much as 19% on Thursday after the software company offered positive remarks regarding its pipeline and the adoption of AI by its clients. The company also topped analyst expectations for the third quarter.

Analysts also expressed optimism after the software company reaffirmed its guidance for the year 2024.

Oppenheimer analysts flagged the robust demand for AI bots. Still, he wants "more confidence and tangible evidence of a durable growth inflection before moving to a more constructive stance."

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