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These are the biggest analyst moves in the area of artificial intelligence (ai) this week.
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Salesforce updated at Morgan Stanley, Wolfe
Earlier this week, Morgan Stanley analysts raised their recommendation on Salesforce Inc (NYSE:). Analysts see several vectors for Salesforce to drive revenue growth, especially given “subdued” investor expectations.
“Low investor expectations for potential upside drivers in price increases, product bundling and data cloud adoption frame an attractive risk/reward for CRM. While the rise of GenAI applications is still more than 12 months away, Data Cloud is likely a bridge to better growth in FY24,” Morgan Stanley analysts said in a note.
Analysts at Wolfe Research also raised their recommendation on CRM stock, seeing double-digit upside to consensus FCF.
UBS sees more ai-driven advantages next year
Generative ai stands out as a disruptive and potentially transformative technology with a historical precedent of creating value in various sectors along the innovation value chain, UBS analysts said in a note.
The development of generative ai contributes to the creation of new hardware and its functionality occurs on platforms managed by operators and enablers. The overall impact is framed as a benefit to the broader economy, indicating widespread positive effects across multiple sectors.
“We expect global demand for ai to increase from $28 billion in 2022 to $300 billion in 2027, according to data from Bloomberg Intelligence, a compound annual growth rate of 61%,” said the investment director for the companies. UBS Americas.
“In that time, we believe that the infrastructure segment will grow by 38% and the applications and models segment by 139%. “We see upside risk to our estimates given improving visibility into infrastructure spending and expanding demand for ai applications.”
Morgan Stanley Shares List of Favorite ai stocks
Analysts at Morgan Stanley believe the ai sector remains well positioned, particularly within the software stock landscape. The investment bank maintains that the potential rewards derived from the significant and transformative impacts of generative ai (GenAI) exceed the rising investor expectations implied by the stock's strong performance in the year 23.
However, analysts caution that despite the positive outlook, GenAI may not act as a universal catalyst, considering longer enterprise product cycles and the relatively tight IT budget environment.
stocks mentioned in the include Microsoft (NASDAQ:), Adobe (NASDAQ:), Snowflake Inc (NYSE:), Salesforce, HubSpot Inc. (NYSE:), etc.
Macquarie introduces GenAI themed basket
Macquarie analysts introduced a GenAI thematic basket to offer investors more diversified exposure.
Analysts expect 2024 to reinforce how the digital and physical worlds are converging into a singular economic reality.
“We are positioning ourselves for a disruptive 2024 in software powered by GenAI, cybersecurity, digital data transformations and rising macro risks.”
The basket of stocks consists of Microsoft, ServiceNow Inc (NYSE , Salesforce, MongoDB (NASDAQ:), CrowdStrike Holdings Inc (NASDAQ:), Powerschool Holdings Inc (NYSE:) and HubSpot.
ServiceNow has also been named a Top Pick at Macquarie due to the “substantial” potential of the GenAI product.
Monness Crespi Hardt is optimistic about Amazon's ai opportunity
Analysts at Monness Crespi Hardt maintained a positive outlook on Amazon.com Inc (NASDAQ , considering the company is well positioned. The analysts reiterated a Buy rating with a $170 price target for the stock.
Analysts note that Amazon is nearing the end of its most challenging time of the year and highlight the company's ability to leverage its strengths in 2024. The investment firm anticipates that Amazon's near-term stock performance will be influenced by data related to consumption. spending during the Christmas season.
“We believe Amazon is well positioned to benefit from digital transformation, capitalize on the cloud, innovate with ai, participate in new healthcare-related opportunities, and take advantage of a more agile cost structure,” the analysts said.
