5 big analyst AI moves: Mizuho's monster Nvidia prediction, Meta upgrade

  • Investing.com
5 big analyst AI moves: Mizuho's monster Nvidia prediction, Meta upgrade
Credit: © Reuters.

Here we look at the biggest analyst moves in the area of artificial intelligence (AI) this week. AI has been the buzzword of the year after fueling a strong year-to-date rally in stocks.

According to Bloomberg, business executives have mentioned the term 390 times already this earnings season compared to 92 a year ago.

  • Mizuho says Nvidia stock price could reach $769

Mizuho analysts said earlier this week that Nvidia (NASDAQ: NVDA ) could generate as much as $300 billion in AI-specific revenue by 2027. They see “a significant opportunity for GPU supplier NVDA” with the TAM (total addressable market) expanding 10 times over the next 5 years to more than $400B.

“Assuming $30-100B AI revenues (or ~$65B at the midpoint), we estimate implied share price to reflect AI estimates for C23-25E would be $490-$769/share, and a midpoint at ~$625 PT,” the analysts wrote in a note.

Mizuho has a $530 per share price target on NVDA stock.

  • New Street Research upgrades Meta stock on AI potential

New Street Research analysts upgraded Meta Platforms (NASDAQ: META ) earlier this week, citing AI momentum.

The firm's move comes on the heels of the release of Llama 2 and the positive feedback it has heard regarding the company's AI efforts.

"The second catalyst for the rating change was the takeaways from our AI Speaker Series, where both Messaging and Metaverse/VR/AR were highlighted as top use cases for generative AI," he said.

"As such, we have an improved longer-term outlook for monetization of WhatsApp and Messenger (perhaps a subscription-based gen AI agent available to businesses?) and the company's Metaverse initiatives, where gen AI capabilities should create significant efficiencies."

  • ‘Messi of AI’: Wedbush starts Palantir at Outperform

Wedbush initiated research coverage of Palantir (NYSE: PLTR ) with an Outperform rating and a $25 per share price target.

“We believe Palantir has built an AI fortress that is unmatched and poised to be a major player in this AI Revolution over the next decade,” Wedbush analysts said in an initiation note on Friday.

Analysts have “a high level of confidence” in Palantir to ride the ongoing AI wave and add that risk/reward at current levels is attractive.

“We believe the stock can continue to re-rate and trade well above its software peer group over time as Palantir continues to expand and capitalize on this AI revolutionary period.”

  • Northland initiates coverage on C3.ai

Northland Capital Markets analysts launched research coverage on C3.ai Inc (NYSE: AI ) with a Market Perform rating and a price target of $40.00.

The company is described as “one of the pure play, public AI companies, having a strong technology heritage and extensive list of blue-chip customers.”

“C3.ai's core value is accelerating the development and use of AI across enterprises. We see myriad drivers, balanced by a changing business model.”

The reason why Northland stayed sidelined despite being bullish on C3’s business is its rich valuation.

  • ServiceNow numbers lifted on strong AI pricing

A number of Wall Street analysts raised price targets on ServiceNow (NYSE: NOW ) after bullish AI-focused comments made by the management on the earnings call.

“We’re in a powerful new ‘AI world,’ where imagination is the only limit. ServiceNow is already seeing our own significant productivity increases with the generative AI solutions we’re releasing to the market, which will rapidly accelerate breakthrough innovation for our customers,” said CEO Bill McDermott after the company reported its Q2 results .

Speaking on the earnings call, ServiceNow announced plans to launch new Generative AI capabilities this fall via Pro+ and Enterprise+ SKUs. ServiceNow's Plus SKUs are expected to have "at least a 60%" list price increase above Pro, the company said.

Mizuho analysts commented that “NOW remains very well positioned for high growth over the next few years, fueled by ongoing demand for workflow automation, strong cross-sell opportunities, and AI monetization.”

Similarly, Needham & Company analysts said that GenAI commentary stole the show.

"Investors have hotly debated ServiceNow's ability to monetize GenAI, with concerns that productivity gains will inherently counteract the company's seat-based pricing model. However, over the last 3 months, management has consistently messaged that Pro SKUs have historically captured a 25% ASP uplift, while seat count has grown 10%. We have conviction GenAI can begin to benefit ServiceNow's financial model in 2HCY24 as adoption scales.”

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