5 big analyst AI moves: Apple reiterated as Top Pick, C3.ai stock upgraded

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

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‘AI-enabled upgrade is coming:’ Apple reiterated as Top Pick at BofA

Bank of America reiterated Apple (NASDAQ:AAPL) stock as their Top Pick, maintaining a price target of $230.

In particular, Wall Street giant analysts are bullish about Apple's transition from smartphones to "IntelliPhones," predicting a significant multi-year upgrade cycle.

"We view the upcoming AI-enabled phones (IntelliPhones) to drive a multi-year upgrade cycle similar to the step function improvement driven by the introduction of smartphones," the note stated.

BofA’s team believes that with a vast installed base of over four billion smartphones, the adoption of AI-enabled IntelliPhones will surpass the rapid uptake seen with smartphones and 5G.

IntelliPhones are expected to leverage advanced AI and machine learning for features such as superior personal assistance, language processing, health monitoring, enhanced photography, and AR/VR experiences, among other things.

Needham downgrades UiPath stock

Needham analysts on Thursday downgraded UiPath (NYSE:PATH) stock from Buy to Hold citing a mix of factors, including macroeconomic headwinds and a changing go-to-market (GTM) strategy.

"We downgrade PATH shares to Hold due to a combination of macro pressure, uncertainty around near-term execution due to a CEO change and a changing GTM strategy, and Y/Y margin compression creating an unfavorable near-term financial profile,” analysts wrote.

The investment firm noted that the company's Q1F25 sales metrics were mildly disappointing, with large deals facing incremental scrutiny.

The recent CEO change back to founder Daniel Dines, following Rob Enslin's departure, and multiple GTM changes are expected to cause near-term sales disruptions.

Net new annual recurring revenue (ARR) and revenue guidance were both lowered, which Needham believes is “conservative enough, but we think it will take multiple quarters for the GTM changes to start driving meaningful upside to guidance.”

Northland ups C3.ai to Buy amid accelerating subscription growth

Enterprise AI firm C3.ai (NYSE:AI) saw its shares upgraded by Northland analysts during the week from Market Perform to Outperform, with a target price of $35.

Analysts highlighted the company’s rising subscription growth in Q4 2024 as a key factor behind the upward revision.

"C3.ai posted accelerating subscription growth to 41% in 4Q24, providing evidence that the headwinds from a migration to a usage-based revenue model are abating," analysts commented.

Looking forward, strong pilot expansion and demand for generative AI (genAI) signal continued high growth, they added.

Mizuho hikes price targets on chip stocks as AI moves to the edge

Japanese investment banking and securities firm Mizuho lifted its price targets on several chipmakers this week, including Micron Technology (NASDAQ:MU), Qualcomm (NASDAQ:QCOM), Seagate Technology PLC (NASDAQ:STX), and Western Digital (NASDAQ:WDC).

The move comes as Mizuho analysts believe the next catalyst for AI will be at the edge, as original equipment manufacturers (OEMs) push AI on-device capabilities for handsets and PCs.

The firm reiterated Buy ratings, raising price targets to $240 for Micron, $155 for Qualcomm, $90 for Seagate, and $110 for Western Digital.

Analysts highlighted Qualcomm's ramp-up with AI PCs using Snapdragon X Elite and Plus, and the expected increase in AI smartphone shipments.

Moreover, AI PCs, requiring 40% to 80% more DRAM, and handsets needing 50% to 100% more DRAM, present tailwinds for Micron. Western Digital and Micron are also expected to benefit from higher NAND content in AI devices with improved pricing.

Meanwhile, Seagate stands out with higher storage content on PCs and increasing cloud capital expenditure. Mizuho forecasts 1 billion AI smartphones shipped from 2024 to 2027, with AI PCs comprising up to 60% of the PC market by 2027.

Dell is a 'legit GenAI participant,' says Loop Capital

In a new note to clients, analysts at Loop Capital reiterated a Buy rating on Dell Technologies (NYSE:DELL) shares and lifted their price target from $125 to $185, emphasizing the IT company is “progressing as a legit GenAI participant.”

"Dell continues to show legitimate GenAI progression the last 90 days which seemingly could progress through CY2025," Loop analysts stated.

The investment bank pointed out Dell's well-positioned stance for long-term commercial IT budget share, noting the company's expanding capabilities across infrastructure products, services, and financing.

Dell identified a $2 to $3 attach revenue opportunity in services, networking, and storage for every $1 of GenAI server revenue.

“On storage specifically, there has been a suggestion in our work that for commercial (non-Hyperscale) Gen AI storage that after VAST Data & WEKA, DELL storage could be as well positioned as PSTG & NTAP, if not better positioned,” analysts wrote.

Analysts also highlighted that Dell has pre-purchased over $7 billion in NVIDIA (NASDAQ:NVDA) GPUs, significantly boosting inventory in the last 90 days. Dell expects to secure $10 to $15 billion worth of GPUs over the next six quarters, aligning with its potential Generative AI revenue of $9 to $10 billion in 2024 and possibly $15 billion in 2025.

Current guidance for Generative AI server revenue in 2024 is about $5 billion. Despite a slight decline in PC shipments and a 200 basis point drop in market share, Dell's core commercial market exposure is expected to grow in late 2024 and 2025.

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