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Morgan Stanley is bullish on the growth potential of AT&T (T.US) and T-Mobile (TMUS.US), while Comcast Corporation Class A (CMCSA.US) has had its rating downgraded.

Morgan Stanley began a significant adjustment to the US telecommunications industry on Monday, upgrading AT&T (T.US) and T-Mobile US (TMUS.US) to a "hold" rating, while downgrading Comcast Corporation Class A (CMCSA.US) to a "hold" rating. This rating adjustment is primarily based on the growth potential and market performance of each company. AT&T is expected to deliver excellent performance due to its leading advantage in fiber products, while T-Mobile US is seen as having significant advantages in wireless products. Analysts at Morgan Stanley further pointed out in a research report on December 16th that AT&T has the most attractive risk/reward profile, with significant upside potential in its stock price compared to the target price of $28. There is an 18% upside potential, and even more in a bull market forecast with a 40% upside potential, and only a 10% downside risk in a bear market forecast. Additionally, they noted that while T-Mobile US has performed well for many years, its strengths in branding, customer service, network leadership, and stable traditional income streams are seen as key factors supporting its future industry-leading growth. However, Morgan Stanley analysts are cautious about the prospects of the cable television industry, predicting a dual challenge of broadband trends and EBITDA growth by 2025. Therefore, they downgraded the rating of media and cable television giant Comcast Corporation Class A from "hold" to "hold" and predict that its residential broadband customer losses will continue until 2027. Furthermore, Comcast Corporation Class A's expansion in wireless business is slower compared to its competitor Charter Communications (CHTR.US), with Charter being more proactive in promoting, marketing, and bundling its Spectrum mobile business. As a result, Morgan Stanley maintains a "hold" rating for Charter Communications.
17/12/2024

Jefferies Financial Group Inc. Forecast 2025: Microsoft Corporation (MSFT.US), Alphabet Inc. Class C (GOOG.US), and Amazon.com, Inc. (AMZN.US) will emerge as winners in AI software.

Investment company Jefferies Financial Group Inc. stated that Microsoft Corporation (MSFT.US), Alphabet Inc. Class C (GOOG.US, GOOGL.US), and Amazon.com, Inc. (AMZN.US) could be the winners in the artificial intelligence (AI) software field next year. Analysts at Jefferies Financial Group Inc. said, "Microsoft Corporation is a major beneficiary of generative AI and will benefit from infrastructure (Azure AI) and application opportunities (various Copilots), but since the release of ChatGPT, the stock has underperformed iShares Expanded Tech-Software Industry ETF (IGV.US) by 19%. With Azure's re-acceleration and Copilot's momentum, we believe Microsoft Corporation will rise again." Jefferies Financial Group Inc. has a "buy" rating on Microsoft Corporation with a target price of $550. Meta Platforms (META.US) is also expected to benefit from generative AI as it can launch AI tools to about 4 billion users and over 200 million businesses through various applications. Analysts at Jefferies Financial Group Inc. said, "Meta can further leverage generative AI to explore new revenue streams beyond advertising through Llama and WhatsApp." Jefferies Financial Group Inc. analysts stated that Amazon.com, Inc. holds over 50% market share in the cloud services provider market, which over time should bring "strong AI revenue potential." Jefferies Financial Group Inc. maintains a "buy" rating on Amazon.com, Inc. and has raised the target price from $235 to $275. Another beneficiary in the AI software field is Snowflake (SNOW.US), and its CEO Sridhar Ramaswamy (appointed in February this year) might change the company's trajectory. Analysts at Jefferies Financial Group Inc. said, "We believe that after hitting bottom in 2024, Snowflake's business will reach an inflection point in the 2025 fiscal year, with strong order volume driving revenue growth, and significantly improving profit margins in the next 2-3 years." Jefferies Financial Group Inc. has raised Snowflake's target price from $180 to $200 and maintains a "buy" rating. Moreover, Alphabet Inc. Class C is considered a pioneer in the AI field and plans to launch more new products. These products will be promoted through its 7 applications with user numbers exceeding 2 billion each. Analysts at Jefferies Financial Group Inc. said, "Alphabet Inc. Class C's impressive performance in models allows them to make significant strides in cloud computing, although currently, Alphabet Inc. Class C lags behind peers in cloud computing."
17/12/2024

Be cautious of inflation rising again! Morgan Stanley recommends reducing exposure to the "big seven" and "Trump trade" in the US stock market.

Morgan Stanley's wealth management company advises investors to consider reducing exposure to large tech stocks and the recent outperforming "Trump trades" because the company believes these assets have downside risks in the face of rising inflation next year. Lisa Shalett, Chief Investment Officer of Morgan Stanley's wealth management company, said that since the November US election, the S&P 500 index has risen by 5% and has accumulated a 27% increase this year, "due to market excitement over the US government's growth-promoting policies." Including the "Big Seven" such as Tesla, Inc. (TSLA.US) and some so-called "Trump trades" like Bitcoin, have been rising ahead of Trump's return to the White House in January next year. However, she said that stock investors seem to believe that the US economy is "essentially operating in a globalized, anti-inflation world." She stated in a report on Monday, "However, we believe we may be in the midst of a significant regime change, where economic growth is re-inflationary," with two key drivers of anti-inflation, globalization and immigration, fading. The company suggests that investors should consider "eliminating large concentration of exposure to the Big Seven and other recent high-performing 'Trump trades' positions through tax-loss harvesting for some protection." They believe that post-election optimism may normalize, growth will gradually slow to a soft landing, profits will be lower than expected, and on a risk-adjusted basis, bonds will outperform stocks. Shalett said that stock investors and the Federal Reserve are dismissing the acceleration of inflation for the next three months, while stock analysts are lowering profit expectations and economists are halving their interest rate cut forecasts for 2025. She noted, "Policy vibrancy may produce new market leadership in 2025, and stock selection is crucial." Morgan Stanley's wealth management company is bullish on the financial, energy, residential real estate, domestically-focused industrial, and brand consumer goods manufacturing sectors. The report also points out that the healthcare industry is currently oversold.
17/12/2024

Jefferies downgrades Ford (F.US) rating to underperform the market, General Motors Company (GM.US) stable strategy is favored.

After the Biden administration revoked the electric vehicle mandate and emissions restrictions, Ford Motor Company (F.US) was supposed to benefit along with other American internal combustion engine vehicle manufacturers. However, the automotive analyst team at Jefferies downgraded Ford's rating from "hold" to "underperform the market", and significantly reduced its target price by 25% to $9, indicating a possible 13% decline in stock price. Behind this rating adjustment are a series of localized challenges Ford faces, rather than systemic ones, including inventory build-up, strategic adjustments or exits in the European business, and a widening gap between warranty reserves and cash flow. It is understood that Ford is facing a particularly difficult start in 2025, with an accumulated gap of up to $8.5 billion between warranty/quality reserves and cash outflow, while the company is also advancing an undisclosed electrification strategy that may focus on range extender technology. Jefferies believes that this strategy may be centered around range extender technology, which will be key to the company's future technological development. Although Ford's balance sheet is considered "robust rather than strong", if the company wishes to maintain a conservative financial position, restructuring and warranty claims may deplete the remaining cash available to shareholders. Meanwhile, the Jefferies team maintained a "hold" rating on General Motors Company (GM.US), believing that its solid capital allocation policy and continued cost-cutting measures position General Motors Company favorably when market trading conditions improve. Although General Motors Company may face pressure from changes in electric vehicle policies in 2025, which could disrupt its efforts to expand production for profitability, and Stellantis (STLA.US) is also seeking to take market share from General Motors Company, Houchois and his team remain optimistic about General Motors Company's future profitability and stock buyback potential.
17/12/2024

Morgan Stanley: Growth in the IT hardware industry will accelerate by 2025, optimistic about Apple Inc. (AAPL.US), Dell Technologies, Inc. Class C (DELL.US), etc.

As 2025 approaches, Morgan Stanley says that investors in the IT hardware sector should "hold on" in the second half of the year. Morgan Stanley analysts said, "We expect hardware growth to accelerate in 2025, and we are more bullish on the enterprise terminal market rather than the consumer terminal market." Apart from Apple Inc. (AAPL.US), the price-earnings ratio in the hardware industry has reached 19 times, the highest in history. While revenue and profit growth ranges between 4% and 7%, much of it has already been absorbed by the market. The analyst added, "We optimistically believe that most hardware terminal market spending will improve in 2025." "Enterprise hardware terminal market growth should be around 3%." The analyst pointed out that this year's enterprise hardware spending growth rate may be around 1.7%, lower by 20 to 160 basis points from historical lows. However, the analyst's optimism for next year is based on the belief that enterprise spending will accelerate, consumer market will also recover, and areas such as personal computers, peripherals, storage, and servers will benefit. In addition, Morgan Stanley's recent AlphaWise survey of US consumers shows that the willingness to spend on consumer electronics in the next six months is the "least negative" in the past three and a half years. Morgan Stanley advises investors to continue holding Apple Inc. (AAPL.US) -- which is also their top pick -- as well as Dell Technologies, Inc. Class C (DELL.US), Seagate Technology Holdings PLC (STX.US), and Kornit Digital (KRNT.US). At the same time, Morgan Stanley states that the stock valuations of companies such as Garmin Ltd. (GRMN.US), Cricut (CRCT.US), and GoPro (GPRO.US) are "too high," while stocks of other companies like Xerox Holdings Corporation (XRX.US) are in a "long-term decline in terminal markets." Morgan Stanley says that other hardware stocks such as CDW (CDW.US), Ingersoll Rand Inc. (INGM.US), and Logitech International (LOGI.US) may be "undervalued or poised for a stronger cyclical recovery in 2025," while IBM (IBM.US) may face headwinds due to its valuation and "negative skew risk/reward."
17/12/2024

Wedbush: Raised target price for Soundhound (SOUN.US) to more than double! The 160% increase in the past month is expected to "ignite" until next year.

The stock price of the AI voice platform SoundHound (SOUN.US) skyrocketed at the end of 2024, rising nearly 160% in just the past month. Wedbush believes that the company will achieve even greater growth in 2025 and maintains an "outperform" rating on the stock, raising its target price from $10 to $22. Analysts at Wedbush, led by Daniel Ives, stated in an investor report, "As the company has been focused on maintaining a strong balance sheet to drive its growth plans, it has recently shifted towards an aggressive yet value-adding acquisition strategy, acquiring three companies (Amelia, SYNQ3, Allset) over the past 18 months to expand its presence in the voice artificial intelligence solutions space and to gain more opportunities." SoundHound is still in the early stages of capturing enterprise artificial intelligence spending, with its chat AI use case being increasingly adopted by more restaurants and automotive industries. Wedbush predicts that as SoundHound enters the voice AI e-commerce market in 2025, its influence will further expand. Ives added, "The company will continue leveraging its partnership with NVIDIA Corporation (NVDA.US) to bring voice generating AI to edge devices without cloud connections, which will be showcased at the 2025 Consumer Electronics Show (CES), demonstrating ongoing improvements in the technology stack while seeking to launch the third pillar of its growth strategy (voice commerce ecosystem) in 2025." Weebler Finance stated in its analysis of the stock last week, "The company's EV/Sales ratio is close to 72, nearly 2000% higher than the industry median of 3.45." Weebler Finance also added, "Despite the valuation showing a significant difference from the industry's normal levels, the growth relative to it is quite astonishing. For example, while the industry's median expected revenue growth is 5.6%, the company's expected revenue growth rate exceeds 74%, a difference of over 1200%. Considering that SoundHound's AI will be a disruptive game-changer leading a generational shift, we believe the long-term prospects are even more promising, indicating significant growth in the stock price in the future."
17/12/2024

CITIC SEC: Corporate IT spending rebounds and the speed of AI productization accelerates. The US software sector has entered a period of improving performance.

CITIC SEC has released a research report stating that, based on the current situation and looking ahead to the next 12-24 months, the firm believes that software will become the most attractive sector for investment in the technology field. This is mainly because the core factors that previously suppressed the sector are expected to gradually ease, and turn into positive catalysts, including the potential for enterprise IT spending to enter an upward cycle, acceleration of AI productization and commercialization by 2025, and the fact that most companies in the sector are currently trading at historically low valuations. Although the firm believes that investors will continue to closely monitor the sustainability of performance improvement and the progress of AI commercialization, there has been a significant change in market sentiment towards this sector. Looking ahead to 2025, the firm believes that companies with strong past performance, continued upward trend, and rapid progress in AI will continue to benefit, while companies with the potential for a turning point in performance and historically low valuations are also worth continuous attention, as they may realize greater valuation potential. CITIC SEC's main points are as follows: Overall assessment: Software SaaS is the top pick for investment in the US technology sector in 2025. Based on the current situation and looking ahead to the next 12-24 months, the firm believes that software will become the most attractive sector for investment in the technology field, mainly because the core factors that previously suppressed the sector are expected to gradually ease and turn into positive catalysts. This includes the potential for enterprise IT spending to enter an upward cycle, acceleration of AI productization and commercialization by 2025, and the fact that most companies in the sector are currently trading at historically low valuations. 1) Software Spending: The firm sees a broad recovery of software spending starting in the third quarter, involving a wide range of customer groups and scenarios, with signs of stabilization and recovery of spending from the most affected SMB and digital native customer groups due to macroeconomic pressures and budget controls. Considering that spending trends in enterprises often have sustainability once the direction is clear, the firm tends to believe that US enterprise software spending has gradually entered a recovery cycle. 2) AI Acceleration: In terms of application software, the evolution of AI products from Assist form to Agent form is expected to cover more customer scenarios and generate higher ROI. Investors hope that the introduction of Agents will significantly contribute to the performance of relevant companies by 2025; in terms of basic software, the growth of AI-related revenue mainly depends on the implementation of more AI applications in production environments. The firm believes that the revenue related to basic software AI is expected to increase significantly in 2025 with the actual implementation of more AI applications. 3) Valuation Position: In stages where software spending is generally under pressure, spending tends to concentrate on areas with rigid and high-priority expenditure that can integrate spending, and most software companies are still trading at historically low levels. If enterprise software spending enters a recovery cycle in 2025, the firm believes that the spending will gradually spread, and subsectors under previous pressure are expected to show significant performance and valuation elasticity. Priority ranking: High performance elasticity, low valuation is preferred. Based on the belief that the US enterprise software spending has gradually entered a recovery cycle, the firm believes that companies with strong past performance, continued upward trend, and rapid progress in AI will continue to benefit in the future. These include: 1) companies in the application software sector with a superior layout, strong execution, and fast adoption of AI. 2) Broad ERP targets that are expected to accelerate performance with the cloudification of ERP. 3) The information security sector with strong and continuous demand. At the same time, the firm believes that companies with the potential for a turning point in performance and historically low valuations are still worth watching, including: 1) cloud-based software companies. If demand continues to recover, combined with accelerated AI-related revenue, the firm believes that the performance growth of basic software companies may exceed expectations and have the potential for high year-on-year growth. 2) Companies with significant pressure from some customer groups. These companies have a high proportion of SMBs, or experienced excessive purchasing from some customer groups during the pandemic, factors that have significantly dragged down growth rates in the past.Now. Looking ahead, on the one hand, the demand of SMB customers is beginning to stabilize and improve, and on the other hand, the impact of excessive purchases during the epidemic period will also be basically digested by the end of this year. These companies are expected to regain growth momentum and realize greater resilience.Follow-up focuses: macro and inflation, government budget, progress of GenAI, etc. Looking ahead to 2025, in addition to the above analysis, the bank believes there are some related factors worth closely monitoring. 1) Risks of economic re-inflation: Although overall inflation in the United States is currently falling, considering the stickiness of inflation in the U.S. labor market that supports core PCE, the bank believes that inflation pressure in the United States is unlikely to quickly dissipate, and the Federal Reserve may slow down its rate cuts or even adjust its policies when inflation rises. If rate cut expectations are hindered, interest rates may remain at a relatively high level, continuing to suppress the valuation and performance of the software sector. 2) Impact of U.S. government spending cuts: The U.S. government's establishment of the Department of Government Efficiency (DOGE) to cut non-core budgets may affect contract income and R&D funds for cloud computing, network security, and other companies. However, in the long term, global IT spending demand is expected to remain robust, and regulatory relaxation is favorable for market competition and technological innovation, especially in the rapid development of AI, cloud computing, and fintech. 3) Constraints and potential risks in the diffusion of AI applications: Although GenAI has aroused great enthusiasm in the market, the actual implementation process still faces issues such as computing resources, cost, security, and privacy risks. In addition, the technical capabilities and business models of AI still need further improvement, and the performance and cost issues of AI agents in handling complex tasks remain to be resolved, which may also hinder the commercialization of AI in the future. Risk factors: Risk of core AI technology development falling short of expectations; risk of continued tightening of technology policy regulation; risk of policy regulation related to private data; risk of global macroeconomic recovery falling short of expectations; risk of macroeconomic fluctuations leading to lower-than-expected IT spending by European and American companies; potential ethical, moral, and privacy risks of AI; risk of data leakage and information security for companies; risk of continuous intensification of industry competition, etc.
17/12/2024

Leading the chip stocks that have led the US stock market into a long bull market, they are expected to continue to "skyrocket" next year.

As 2025 approaches, the analyst team at Wall Street financial giant Bank of America Corp (Bank of America) has released the "preferred chip stock list" for the US stock market next year, including the "AI chip three giants" that have been extremely popular in the US stock market since 2023. According to the Bank of America analyst team, chip stocks are likely to continue to be one of the most eye-catching sectors in the US stock market next year, and the contribution to the increase in value is expected to expand from the "AI chip three giants" that have benefited from the AI boom to analog chips and electric vehicle chip stocks, which have long underperformed the US stock market index and the Philadelphia Semiconductor Index. The latest report from the Bank of America analysis team shows that one of the core DRIVES of this round of "long-term bull market" in the US stock market since 2023, chip stocks, regained global favor after being sold off at the beginning of the financial reporting season, and are expected to continue to attract funds in 2025, making it very likely to once again start a skyrocketing bull market trend, becoming the core focus of the US stock market. The "AI chip three giants" in the US chip sector - NVIDIA Corporation (NVDA.US), Broadcom Inc. (AVGO.US), and Marvell Technology, Inc. (MRVL.US) are all listed on Bank of America Corp's 2025 "preferred chip stock list". The chip stocks on this list also include semiconductor equipment giant Lam Research Corporation (LRCX.US), automotive chip leader ON Semiconductor Corporation (ON.US), and one of the EDA software leaders Cadence Design Systems (CDNS.US). Among the "AI chip three giants," Broadcom Inc. is undoubtedly the most dazzling chip company in the recent US stock market, and even in the global chip market. After announcing strong growth in performance and extremely optimistic outlook for the AI ASIC chip market last Friday morning Beijing time, its stock price surged by over 20% in a single day in the US stock market, exceeding the important milestone of a trillion-dollar market value. On Monday during the US stock trading hours, it continued to rise by over 10%, with a total market value close to 1.2 trillion US dollars. Among the "AI chip three giants", NVIDIA Corporation focuses on AI GPU, while the latter two focus on the AI ASIC chip market. Customized AI ASICs can provide hardware acceleration for specific tasks, especially in large-scale AI training and inference tasks. They outperform general-purpose NVIDIA Corporation GPUs in terms of efficiency and cost-effectiveness. These two types of AI chips will coexist in the long term, providing the best solutions for different AI computing scenarios. With strong demand for Broadcom Inc.'s Ethernet switch chips in major data centers around the world, and its absolute technical leadership in chip-to-chip communication and high-speed data transfer between chips, Broadcom Inc. has become the most important player in the field of custom AI chips in recent years. For example, in the development of Alphabet Inc. Class C's self-developed server AI chip - TPU AI acceleration chip, Broadcom Inc. is a core player. Broadcom Inc. and Alphabet Inc. Class C's team jointly participate in the development of the TPU AI acceleration chip and AI training/inference acceleration library. In addition to chip design, Broadcom Inc. also provides Alphabet Inc. Class C with key inter-chip communication intellectual property rights and is responsible for manufacturing, testing, and packaging new chips, thereby providing essential support for Alphabet Inc. Class C to expand into new AI data centers. With its leading position in the AI ASIC market, Broadcom Inc. may soon break NVIDIA Corporation's "AI chip monopoly". Analyst Jordan Klein from Mizuho pointed out that Wall Street is paying attention to the demand for ASICs from large cloud computing companies such as Alphabet Inc. Class C, which may be one of the reasons for the unexpected decline in NVIDIA Corporation's stock last Friday. "In my opinion, custom AI chips will continue to take market share from NVIDIA Corporation's AI GPU every year, even though NVIDIA Corporation's GPUs still dominate AI training purposes." The semiconductor boom cycle is far from over, and the soaring chip stocks still have plenty of room to grow. "After experiencing a big rise, chip stocks still have plenty of room to grow, and we believe there will be two different upward trend curves in 2025," wrote the team led by Bank of America Corp analyst Vivek Arya in this chip stock research report. "In the first half of the year, AI investments driven by US cloud super customers and the deployment scale of NVIDIA Corporation's Blackwell Architecture AI GPU will maintain the upward momentum of chip companies closely related to AI. In the second half of the year, if the global economy continues to recover, the market focus may shift to inventory replenishment and the recovery of automobile production, which means that automotive/industrial chip manufacturers that have long been underweight and significantly underperformed the US stock market may regain favor with investors." The Bank of America Corp team led by Arya also stated that overall, semiconductor market sales are expected to increase by about 15% in 2025, reaching $725 billion, on the basis of strong growth in 2024. "This is still a very strong growth pace, although it is slightly lower than this year's 20% forecast.""Compared to before, the growth rate has slightly decreased."The analysis team added that NVIDIA Corporation, Broadcom Inc., and Marvell Technology, Inc. are expected to continue benefiting from the market demand closely related to data center artificial intelligence chips, large-scale cloud computing customers, and the surging demand for AI computing resources from global data center operators. Semiconductor equipment giant, Applied Materials, Inc., is also expected to benefit from flash memory demand and the ongoing recovery of semiconductor equipment spending in the Chinese market. In addition, the Bank of America analysis team stated that the automotive chip giant, ON Semiconductor Corporation, which has long lagged behind the US stock market and the Philadelphia Semiconductor Index, is expected to greatly benefit from the recovery in demand for electric vehicles and the automotive industry as a whole (possibly in the second half of next year). KLA Corporation has long been a leader in chip design automation and is expected to benefit in the long term from leading chip designers such as NVIDIA Corporation, AMD, and Apple Inc., as well as tech giants like Amazon.com, Inc., and Microsoft Corporation stepping up their research and development of high-performance AI chips. The demand for electronic design automation (EDA) software that can design more complex architecture AI chips and accelerate chip design with new AI technologies is expected to continue to expand. EDA software tools are indispensable for all types of chip design by chip giants such as Apple Inc., NVIDIA Corporation, and AMD, while lithography machines are one of the core tools for transforming chip design blueprints into actual products. The Bank of America analysis team led by Alia pointed out in the report, "The semiconductor market's prosperity cycle often lasts about 2.5 years (followed by a 1-year downturn), and we are currently only in the mid-term stage of this semiconductor upswing cycle that began in [the fourth quarter of 2023]." "We expect sales in the storage chip market to grow by 20% in 2025 based on a strong foundation in 2024, an increase from 79% in 2024," the report noted, predicting that the core semiconductor market (excluding the storage sector) is expected to grow 13% primarily due to strong performance in data centers, while other subsectors like consumer electronics, electric vehicles, and the automotive sector, and industrial chip products may see a slight decline compared to 2024, but the decline is expected to be much smaller. This optimistic outlook for the semiconductor market in the Bank of America Corp.'s research report is in line with the latest World Semiconductor Trade Statistics (WSTS) forecast for the semiconductor market size, which is expected to continue strong growth in chip demand in 2025. Compared to the spring forecast, WSTS has significantly raised its forecast data for the 2024 and 2025 semiconductor market size in its latest autumn forecast, predicting a 19.0% year-on-year growth to $627 billion in the global semiconductor market in 2024. WSTS expects the semiconductor market size to continue growing in 2025, which means that the global semiconductor market is expected to grow by approximately 11.2% on top of the already strong recovery trend in 2024, with the global market size expected to reach around $697 billion. WSTS expects that the growth in the semiconductor market size in 2025 will be mainly driven by the storage chip category and the artificial intelligence logic chip category. Under the continued strong push of the unprecedented global AI trend, the total sales growth of the storage chip category dominated by DRAM and NAND is expected to exceed 13% in 2025, while the total sales growth of the logic chip category including CPUs and GPUs is expected to exceed 16%. It is also expected that the growth rates of discrete devices, optoelectronics, sensors, MCUs, and analog chips, among all other sub-categories of chips, will achieve single-digit growth rates. For chip stocks, some potential risks cannot be ignored Although the overall outlook for the semiconductor market remains optimistic, the Bank of America Corp. analysis team stated in the research report that there are still many unknown factors for 2025, with the biggest negative impact concentrated on the growth of market demand related to artificial intelligence, demand in the Chinese market, broader macroeconomic recovery conditions, and how the story of the American chip giant Intel Corporation will continue. The Bank of America analysis team led by Alia added that as AI applications accelerate penetration into enterprise operations and daily lives of individual consumers, the "rotation trend" from semiconductor stocks to software stocks benefiting from AI will continue in 2025. This trend may intermittently put pressure on the upward trend of popular chip stocks and drive profit-taking in chip stocks, shifting towards software stocks. "From a positive perspective, we can see that under the leadership of the new US government led by President Trump, the support policies for US economic growth will promote the resumption of mergers and acquisitions (especially in the semiconductor and software markets)," the Bank of America analysis team wrote. Nevertheless, the Bank of America analysis team led by Alia emphasized in the report that chip stocks benefiting from the booming global AI trend, especially the "AI chip three giants," are expected to continue strong gains, at least until the second half of 2025. In addition to these three popular chip stocks and the aforementioned "preferred chip stock list," the Bank of America analysis team stated that chip giants like ARM (ARM.US), Micron Technology (MU.US), Coherent (COHR.US), Credo Technology (CRDO.US), and Macom (MTSI) also have the potential to greatly benefit from this unprecedented AI trend.
17/12/2024

The "OpenAI moment" of quantum computing? Companies like Quantum Computing (QUBT.US) are highly sought after by investors.

Noticed that, despite the lack of commercialization, Quantum Computing (QUBT.US) led the quantum stocks on Monday as the market's enthusiasm for quantum computing technology continues to grow. At close, Quantum Computing's stock price surged 68%. In just the past month, its stock price has risen by about 370%. D-Wave Quantum (QBTS.US) rose by over 45%, with its market value increasing by over 400% in the past month. Rigetti Computing (RGTI.US) has risen at an astonishing rate of over 630% in the last 30 days. Due to Morgan Stanley raising the target price for IonQ Inc (IONQ.US), the company's stock price surged nearly 24% in Monday's trading. Morgan Stanley analyst Joseph Moore stated in an investor report on Monday, "We cannot identify a specific catalyst for the appreciation of stocks in this area during this time, but we do see continued signs that investment in quantum will continue to grow rapidly." "Recently, US Congress introduced a bill authorizing the federal government to provide $2.7 billion in funding for quantum technology." Morgan Stanley raised IonQ's target price from $14.90 to over $37, but emphasized in their recent announcement "the potential impact of the technology, rather than actual short-term appreciation. We do expect this to unfold in the coming years." Moore added, "Clearly, the market is enthusiastic about the potential of quantum technology to participate in a $200 billion AI TAM by 2026, although we believe this is still uncertain." US Senator Maria Cantwell (Washington State Democrat) stated, "Advancements in quantum science and technology will change the game. Quantum applications in sensing, computing, and communication fields will reshape our future, from breakthroughs in healthcare to solutions from Clean Energy Fuels Corp." Other recent announcements in the quantum computing field include Amazon.com, Inc.'s launch of Quantum Embark, designed to help customers prepare for the quantum computing era, which is an emerging field that harnesses the power of quantum mechanics. After Alphabet Inc. Class C announced the significant quantum chip Willow last week, quantum computing stocks have been highly anticipated. Bank of America Corp analysts noted that while applications of quantum computing are still in the early stages, Willow's release has had a significant impact on market sentiment.
17/12/2024

AI-driven stock price continued to rise for two days, reaching a new high. Several Wall Street institutions have raised the target price for Broadcom Inc. (AVGO.US).

Last Friday, the market value of Broadcom Inc. (AVGO.US) surpassed $1 trillion for the first time, achieving the highest single-day increase in history with a stock price surge of 24%. This Monday, driven by multiple Wall Street institutions raising their target prices, Broadcom Inc.'s stock price rose over 11% again, closing at $250. The latest increase in Broadcom Inc.'s stock price comes from the release of better-than-expected financial reports on Thursday night and an optimistic outlook for the first quarter. As a supplier of semiconductor and infrastructure software, Broadcom Inc. has benefited from the explosive growth of generative artificial intelligence. This year, the company's AI-related revenue increased by a significant 220%, reaching $12.2 billion. Goldman Sachs Group, Inc. analysts recommend investors to buy Broadcom Inc. stocks and have raised their 12-month target price from $190 to $240. They mentioned that Broadcom Inc. has added several major customers for its customized silicon products and highly praised the company's execution capabilities after completing the $61 billion VMware acquisition last year. "We are more confident in the company's future revenue and profit growth prospects." Barclays PLC Sponsored ADR has increased Broadcom Inc.'s target price from $200 to $205, while Truist has raised the target price from $245 to $260. As of this Monday, Broadcom Inc.'s stock price has increased by over 126% this year, while another leading company in the AI field, NVIDIA Corporation (NVDA.US), has seen its stock price rise by over 165% this year, with a market value of $3.2 trillion. In comparison, the Nasdaq index has seen a 34% increase for the year. Broadcom Inc. refers to its customized AI accelerator as XPU, which is different from the GPUs sold by NVIDIA Corporation. The company revealed that XPU shipments doubled in the fourth quarter, primarily to three mega-scale enterprise customers. Although the company did not disclose specific customer names, analysts generally believe that these three major customers are Meta (META.US), Alphabet (GOOGL.US, GOOG.US), and the parent company of TikTok, ByteDance. Broadcom Inc.'s layout in the AI field, along with its XPU technology and strong market demand, has created significant growth momentum for the company. In the context of rapid development of generative AI, industry giants like Broadcom Inc. and NVIDIA Corporation are expected to continue benefiting from this trend.
17/12/2024
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