Tuesday, 25 June 2024
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Arm impresses; key year for Baidu; Gemini Ultra hype By Investing.com

Arm files for IPO, Microsoft alters Activision deal - what's moving markets

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

InvestingPro subscribers always get first dibs on market-moving AI analyst comments.

Jefferies impressed with Arm , expects AI momentum to continue

UK-based chipmaker Arm Holdings ADR (NASDAQ:) soared 60% in the past week as investors scrambled to buy the company’s shares in the wake of its impressive FQ3 results and guidance.

Amidst this optimism, Jefferies analysts raised forecasts on ARM and hiked their target price to $115 from $98.

“Stronger-than-expected FYQ3 results and FYQ4 guidance reinforces our view that ARM is a key beneficiary of rising demand for edge AI devices, especially premium smartphones,” they said.

“Royalty growth is forecast to accelerate due to a faster transition to devices using V9 architecture, which has double the royalty rates of V8. AI is also driving higher chip design activity and, therefore, higher licensing revenue.”

Morgan Stanley lifts estimates on Nvidia, cites ‘very strong near-term picture’

The excitement surrounding NVIDIA Corporation (NASDAQ:) continues unabated.

Despite surging 50% since the start of 2024, Wall Street remains confident that NVDA, a key player in the ongoing AI boom, has more to offer.

On Wednesday, Morgan Stanley analysts raised their estimates on the chipmaker, citing “a very strong near-term picture.” In the long run, cloud commentary remains encouraging, though the broker expects a plateau in 2025.

“We remain very comfortable with the competitive dynamic despite the enthusiasm for alternatives,” analysts wrote in a note.

“The 2025 picture is a tougher call – we expect another very strong training year, but it remains to be seen if that drives incremental growth for training from what is already more than 30% of cloud budgets in CY24,” they added.

Bernstein analyst: 2024 is Baidu’s “make or break” year

Elsewhere, Chinese technology and AI giant Baidu Inc (NASDAQ:) is facing a “make or break” year, according to Bernstein analysts.

Specifically, the company is striving to expand its AI capabilities across its business operations while facing intensified competition from AI enhancements.

Analsyts said there are three primary aspects of Baidu’s AI strategy that investors should examine to either confirm or refute the investment rationale.

First, Baidu must secure additional ad revenue through search optimization in a mature market, requiring a…

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