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Investing.com – These are the biggest analyst moves in the artificial intelligence (ai) space this week.
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Morgan Stanley says Apple's shift from EVs to GenAI is a 'positive development'
Bloomberg News reported earlier this week that Apple (NASDAQ stopped work on its electric vehicle (EV), an initiative called Project Titan, which was started a decade ago.
The technology company announced it internally on Tuesday, taking the project's nearly 2,000 employees by surprise.
Following the disruption, many members of the Special Projects Group (SPG) will now join Apple's artificial intelligence (ai) sector, led by executive John Giannandrea, to work on generative ai solutions, according to the report.
Commenting on this development, Morgan Stanley said that the reported news, if true, “would be a positive development” for the technology giant.
That's because the move “should allow the company to repurpose assets toward larger initiatives like Gen ai” and “shows relative cost discipline,” analysts led by Erik W. Woodring said in a note.
Dell restored as Top Pick in M. Stanley, PT rose
Analysts at Morgan Stanley were impressed by Dell Technologies' (NYSE:) latest quarterly report, in which the company's ai portfolio “is well ahead” of the investment giant's previous expectations “and directionally closer of our bullish supply chain checks.
“…DELL ai Server commentary stole the show as backlog nearly doubled QoQ, orders grew ~40% QoQ, and the pipeline ended the January quarter with a QoQ increase of ” multiples of pending work”.
“These are all signs that support our bullish checks of the ai server supply chain and show that DELL is a clear leader in the $72 billion ai hardware and services market,” wrote analysts led by Erik W. Woodring in a note on Friday.
Additionally, Woodring called Dell's fiscal 2025 guidance conservative and believes there is still outperformance to capture in the stock.
Therefore, the analyst reiterated DELL as a Top Pick and increased the price target from $100 to $128.
BofA raises Broadcom PT to $1,500
Broadcom (NASDAQ will announce its fiscal first quarter 2024 results after the market closes on Thursday, March 7.
There is slightly greater anticipation surrounding the report, given that its shares have risen 17% since the beginning of the year, outpacing the 12% gain seen in the SOX index, as ai-driven market momentum continues.
In their report preview, Bank of America analysts led by Vivek Arya raised their price target on the stock from $1,250 to $1,500, implying an upside of more than 7% from current levels.
While volatility in Broadcom stock is possible if the company's fiscal 2024 estimates remain broadly unchanged, BofA expects “any stock pullback will likely be short-lived.”
That's because investors will be looking forward to Broadcom's ai Investor Day on March 20 and will likely “continue to appreciate AVGO's unique combination of capital appreciation, dividend yield/growth, and its position as an ai beneficiary of “low beta””.
Wells Fargo downgrades HP Enterprise
Wells Fargo equity analyst Aaron Rakers downgraded Hewlett Packard Enterprise (NYSE from overweight to equal weight and reduced the price target from $21 to $17.
“While we remain positive on HPE's strategic/architectural positioning for HPC and ai convergence (e.g., large-scale deployments leveraging proprietary Slingshot interconnect), the pace of revenue conversion and underlying EBIT percentage remain being key questions,” he said in a note.
Additionally, despite viewing Hewlett Packard Enterprise's Intelligent Edge as a long-term growth catalyst and positive influence on margins, the expected normalization of growth is delayed due to prolonged customer inventory adjustment periods, he added. Rakers.
Macquarie expects high-profile ai failures in 2024
In a note to investors on Monday, Macquarie analysts predicted that the year 2024 could see major failures in generative ai technologies.
The broker highlighted several recent incidents in this field, including the ChatGPT malfunction last week, where it produced illogical responses for several hours before OpenAI rectified the issue.
Additionally, they also pointed to criticism directed at Google's (NASDAQ:) (NASDAQ:) Gemini project for generating historically inaccurate images, despite its focus on diversity.
“ChatGPT became temporarily unintelligible, and Google's diversity-focused Gemini came under fire for historically inaccurate images,” said a team of analysts led by Frederick Havemeyer.
“Questions are now mounting about whether ai vendors are in a position to revise history and create a post-truth Internet,” they added.
Regulatory and ai alignment efforts aim to address emerging issues, but incidents like inaccurate historical Gemini images highlight potential new challenges, analysts said.
Last week's rulings reinforce Macquarie's forecast of notable generative ai failures in 2024, especially as ai gains visibility during the election cycle.
