In a recent development, JPMorgan AI industry analysts have made significant upgrades and promotions in the tech industry. First on their list, Dell Technologies Inc (NYSE: DELL) has been upgraded from Neutral to Overweight. This decision stems from Dell’s favorable positioning in the AI-driven Compute investment cycle. Analysts expect branded server companies like Dell to thrive, even as other businesses face mixed prospects in light of macroeconomic conditions. The move underscores the potential for growth in the AI sector.
Similarly, Arista Networks (NYSE: ANET) has received a notable promotion, being named a top pick by JPMorgan. This recognition is attributed to the company’s accelerating growth in the field of AI. Arista Networks is expected to sustain or even expand its valuation premium as AI revenues continue to ramp up, offering higher visibility into the driver for growth acceleration.
BMO identifies AI leaders: Alphabet and Amazon
In a comprehensive research coverage of 25 stocks in the internet sector, BMO AI industry analysts have spotlighted Alphabet Inc (NASDAQ: GOOGL) as the best-positioned player to capitalize on the proliferation of generative AI and large language models. Google’s integration of machine learning into its core products since 2000 gives Alphabet a significant advantage, with over a decade head start relative to the industry. The acquisition of DeepMind in 2014 has also greatly enhanced its AI capabilities.
Amazon.com Inc (NASDAQ: AMZN) is another heavyweight mentioned by BMO. Amazon’s investments in Trainium and Inferentia chips, along with developments in the middle layer of the stack, such as Bedrock and CodeWhisperer, position the e-commerce giant to benefit from artificial intelligence and machine learning technologies. Amazon’s commitment to AI reflects its strategic focus on future growth opportunities.
AI takes center stage in CIO priority lists – According to AI industry analysts
Chief Information Officers (CIOs) are increasingly recognizing the pivotal role of AI and machine learning in shaping their IT strategies. According to Morgan Stanley’s Q4 CIO survey, AI and ML have surged to the forefront of CIO priority lists, with 68% acknowledging the impact of these technologies on their existing IT budgets.
The survey also reveals that IT spending growth is expected to accelerate from 2.6% in 2023 to 3.3% in 2024. This growth, while positive, still falls below the pre-COVID 10-year average of 4.1%. AI and ML have risen to the top of CIOs’ priority lists, signaling their crucial role in shaping future IT investments. Data warehousing/analytics and security also feature prominently in CIO priorities.
Marvell Technology gets a price target boost
Bank of America analysts have raised the price target for Marvell Technology Inc (NASDAQ: MRVL) from $68 to $80 per share, underlining the company’s progress in the custom AI chip ramp. Conversations with Marvell’s management during the CES tradeshow in Las Vegas have revealed promising trends in cloud AI demand. Marvell, alongside other key suppliers like NVDA, AVGO, and AMD, plays a critical role in providing compute and networking components to cloud customers.
The positive outlook on Marvell’s custom AI chip ramp suggests potential growth that could be 1.5-2 times greater than previously assumed, with expected revenues of $250 million in CY24 and $450 million in CY25. This signals Marvell’s significant role in fueling the growing demand for cloud-based AI solutions.
Baidu: Poised to be a leading AI contributor
Macquarie, in its latest analysis, has initiated coverage of Baidu Inc (NASDAQ: BIDU) with an Outperform rating and a target price of $150 per share. Baidu’s strategic emphasis on its core advertising business positions the company well to maintain a stable market share. Furthermore, Baidu stands to benefit from a potential cyclical rebound in advertising budgets, creating room for further growth.
Notably, Baidu has been directing substantial resources towards building a full-stack AI ecosystem, catering to both enterprise and consumer scenarios. While revenue contribution from GenAI remains modest at low-single-digit percentages, AI industry analysts say that Baidu is expected to maintain its leading position in China’s AI Cloud market due to its robust AI capabilities and improving market recognition.
