Apple Inc (NASDAQ:AAPL) stands to benefit from advancements in AI and Vision Pro devices, as indicated by Bank of America analysts. The analysts predict a positive shift in EPS estimate revisions.
Consequently, the analysts have upgraded their rating on AAPL stock from Neutral to Buy, with the price target elevated to $225 per share.
The key reasons for this upgrade include a more robust multi-year iPhone upgrade cycle fueled by the necessity for cutting-edge hardware to support Generative AI features set to debut in 2024⁄2025. Additionally, there is an expected uptick in Services growth as Apple capitalizes on its existing user base. The transition in Apple’s silicon roadmap towards Servers and Autonomous technologies is projected to drive improved margins.
Furthermore, the analysts highlight the company’s strong capital returns, stable to increasing gross margins over time, and the potential for institutional investors to increase their AAPL positions in anticipation of AI advancements. They also note that Apple is currently underweighted compared to the S&P500. The manageable risks surrounding legal issues and the recent underperformance relative to expectations are also factors contributing to the upgraded rating.
On the other hand, Evercore ISI analysts have raised the rating on International Business Machines (NYSE:IBM) stock to Outperform. They believe that as enterprises seek to implement AI tools for enhanced productivity, IBM’s consulting and software assets uniquely position them to address complexities related to data security and deployment of AI tools both on-premise and off-premise.
Similarly, Citi analysts have designated Marvell Technology Inc (NASDAQ:MRVL) as a Top Pick, citing various tailwinds linked to AI. They are optimistic about the company’s prospects in 2024, driven by the continuous growth in AI optics, custom ASIC AI project sales, and the stabilization of non-cloud markets such as enterprise networking and carrier segments.
Goldman Sachs analysts have reinstated Broadcom Inc (NASDAQ:AVGO) at Buy, with expectations of robust double-digit revenue growth in the company’s AI-related businesses, particularly in high-speed Networking and custom compute sectors.
Canaccord Genuity analysts have raised their price target on Qualcomm Incorporated (NASDAQ:QCOM) stock, anticipating a resurgence in revenue and EPS growth in the fiscal years 2024 and 2025, supported by on-device generative AI and a compelling product roadmap.
Despite achieving a remarkable 62% relative outperformance in 2023, Bernstein maintains a positive outlook on Dell Technologies Inc (NYSE:DELL), reaffirming an Outperform rating with a price target of $90. Dell’s strengths lie in its direct distribution model, scale, corporate relationships, and strong free cash flow conversion. The analysts view AI servers as a significant revenue opportunity for Dell, projecting substantial incremental YoY growth if current order activity levels persist.
Morgan Stanley analysts anticipate a 7% YoY increase in core revenue for Baidu Inc (NASDAQ:BIDU), with a 6% YoY uptick in advertising revenue amid a subdued macro environment in the fourth quarter. Cloud growth is expected to surge by 10% YoY, driven by AI contributions. The analysts view Baidu as a top AI player in China, foreseeing a 10% YoY rise in core non-GAAP operating profit and stable margins due to disciplined cost management strategies.
