Technology

Broadcom Shifts to Growth Stock on Boost From AI, VMWare, BofA Says

/ / Technology /

Broadcom (AVGO) is a top pick on a shift to a growth stock from a value stock, mostly because of boosts from artificial intelligence and VMWare, BofA Securities said Monday in a report. Compound annual growth in 2024 to 2026 may accelerate to 13% from 5% to 10% normalized in the traditional business from 2017 to 2023, driven by AI silicon and VMWare compound annual growth at 24%, BofA said. Cost savings from VMWare and a strong balance sheet might boost margins to 61%, increasing earnings by 20% annually, the report said. Broadcom’s earnings per share in 2026 may reach $69, while faster sales at 15% to 17% annually with a metric on margins up to 65% to 67% may drive EPS to $80 per share, the report said. “There is also the potential for further mergers and acquisitions next year, as gross leverage remains low” and the company “continues […]

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Nvidia Is No Cisco, but It Is Getting Expensive — Heard on the Street

/ / Technology /

Is a great business worth any price? Nvidia investors finally seem to be asking themselves that question. The chip maker powering the artificial-intelligence revolution blew past $3 trillion in market capitalization earlier this month barely three months after passing $2 trillion. It even became the world’s most valuable company earlier this week, briefly surpassing Microsoft and Apple. That seems to have given investors some pause; Nvidia’s share price has slipped nearly 7% since trading resumed after the Juneteenth holiday. Still, with a value of a little over $3.1 trillion as of Friday’s close, Nvidia is hardly cheap. That is merely 2% below that of Apple, a company with more than 2 1/2 times Nvidia’s trailing 12-month free cash flow. The stock is also now at nearly 45 times projected earnings for the next four quarters. That is 11% above its five-year average multiple and about 35% higher than what the

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Micron Technology’s Fiscal Q3 Likely to Beat Expectations, Wedbush Says

/ / Uncategorized, Technology /

Micron Technology’s (MU) fiscal Q3 results, slated for release on June 26, will likely beat expectations on higher sales of computer memory, Wedbush Securities said Tuesday in a note to clients. “We believe memory ASP gains were significantly ahead of expectations embedded in [Micron’s] guide,” the firm said. “And, we believe that [Micron] will outperform peers on a healthy mix shift towards eSSDs and DDR5.” Wedbush said it increased its revenue and EPS estimates for Micron’s fiscal Q3 to $6.93 billion and $0.64, above the high end of the company’s previous guide of $6.6 billion, give or take $200 million, and 0.45, plus or minus $0.07, respectively. The brokerage’s updated estimates are also ahead of average consensus of $6.64 billion and $0.50, respectively. The firm lifted Micron’s price target to $170 from $130 and maintained its outperform rating. The company’s shares were up 4% in recent trading.

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CFRA Maintains Buy Opinion On Shares Of Qualcomm Incorporated

/ / Technology /

We boost our 12-month target to $260 from $200 on a revised P/E of 22.2x our CY 25 EPS view of $11.68, within peers but above historical. We raise our FY 24 (Sep.) EPS to $10.00 from $9.92, lift FY 25’s to $11.28 from $10.91, and set FY 26’s at $12.75. We think QCOM is poised to be a major beneficiary of the ongoing shift of AI toward the device level over the next 12 months, potentially driving significant upside to our estimates. On the smartphone side, we see a better-than-expected iPhone 16 refresh cycle, content gains in future Samsung devices, and improving trends from China providers all supporting higher growth. In addition, we like QCOM’s growing addressable market opportunity, as Windows-based AI PCs gain traction with QCOM’s NPUs (QCOM previously had no share in PCs) and new IoT/industrial uses emerge over time. Not to be forgotten, we are also

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Nvidia Gains. AI Chip Maker Already Tops Analyst Forecasts After Stock Split. — Barrons.com

/ / Technology /

By Adam Clark Nvidia stock was rising early on Friday to finish its first week following its stock split on a positive note. The chip maker has risen ahead of Wall Street’s consensus targets for the stock. Nvidia shares were up 1.5% at $131.57 in premarket trading. The stock closed up 3.5% on Thursday. Nvidia’s 10-for-1 stock split took effect a week ago and the stock is now ahead of Wall Street’s average price target of $123.35, according to FactSet. Nvidia’s strong rally has seen it outpace analysts’ expectations on multiple occasions during the AI rally. The company’s forward price-to-earnings multiple currently stands at around 43 times. That’s not putting off the bulls. Oppenheimer’s Rick Schafer reiterated a $150 price target on the stock in a research note this week, based on a price-to-earnings multiple of 36 times Nvidia’s forecast earnings in 2026. “We see several structural tailwinds driving sustained

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Nvidia Set for Over 20% Weighting in SPFR ETF, Apple to Drop Significantly

/ / Technology / ,

Nvidia’s (NVDA) weighting in the index that the Technology Select Sector SPDR (XLK) exchange-traded fund follows will likely increase to around 21%, displacing Apple (AAPL) as the second top pick next to Microsoft (MSFT), CNBC reported Monday. Apple’s weighting will drop significantly to 4.5% from about 22% while Nvidia is set to rise sharply from just 6% amid Nvidia shares’ outperformance this year, the report said, citing Matthew Bartolini, head of SPDR Americas Research. The major technology ETF will be forced to acquire more than $10 billion worth of Nvidia shares while cutting back dramatically on Apple, the report said. SPDR does not comment on specific trading strategies around rebalances, the report said.

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TSMC Can Maintain Revenue Strength Through 2026, Citi Says

/ / Technology /

TSMC should see promising surging demand from cloud and edge AI, which will likely drive revenue growth through 2026, Citi research analyst Laura Chen writes in a note. TSMC should be able to reflect its value to customers and it may adjust prices for products given rising demand, Chen says. Given stronger revenue growth, capex intensity should also continue trending downwards, though TSMC will likely lift the range of capex expected in 2024 to US$30 billion-US$32 billion from US$28 billion-US$32 billion, given escalating advanced node demand, Chen adds. Citi raises its target price on the stock to NT$1,150 from NT$1,030 while reiterating its buy rating. Shares closed 0.1% lower at NT$921.00.

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Microsoft Stock Price Target Raised. Why the AI Party Is Just Getting Started. — Barrons.com

/ / Technology /

By Brian Swint Microsoft, one of the three biggest companies by market capitalization, is only just starting to reap the benefits of artificial intelligence. That’s the view of analysts at Wedbush led by Dan Ives, who raised their price target to $550 from $500 in a note published Sunday and maintained an Outperform rating. While Ives is known for his bullish views on technology stocks, the analysts have based their stance on research conducted with Microsoft customers for insight into their future spending plans. “The stock still has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story with a strong competitive cloud edge vs. Amazon especially and Google,” said Wedbush. “It has become crystal clear to us that the monetization opportunities around deploying AI and ChatGPT in the cloud is a transformational opportunity.” Microsoft mainly uses AI in

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Oracle Trades One-Time License Revenue for Large Cloud Contracts

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Oracle’s results are getting a boost from longer recurring contracts. CEO Safra Catz says on a call with analysts that the company is trading one-time, non-recurring license revenue for larger “strategic customer commitments.” Those deals, which have surged because of strong demand for AI products and training large language models, stretch multiple years, she said, and are expected to lead to accelerating revenue growth. Oracle announces two big wins, one with Google Cloud and one with Microsoft and OpenAI, and those large contracts appear to be showing up in the company’s remaining performance obligations, a proxy for backlog. RPO was up 44% year-on-year in 4Q. Shares rise 9.7% post-market.

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Oracle CEO: Long-Term Targets May Prove Too Conservative

/ / Technology /

Oracle’s AI momentum is making longer-term financial targets look meager. CEO Safra Catz says on a call with analysts that she is still “firmly committed” to FY26 targets for revenue, margins and earnings. “However, given our strong bookings results, I believe some of these goals might prove to be too conservative given our momentum,” she says. And Oracle seems to be prepared to spend big to keep momentum going: Catz says capital expenditures this fiscal year will likely be double that of the previous fiscal year. Shares rise 8.8% to $134.75 after-hours.

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Oracle Wants A Cloud Deal With AWS

/ / Technology /

After arrangements to connect its cloud customers with Google and Microsoft, Oracle says that a deal with Amazon Web Services could be next. CTO Larry Ellison says on a call with analysts that the company believes all clouds should be interconnected, making it easier for customers who use multiple cloud services to use them all at once. Oracle already has connections with Microsoft’s Azure and on Tuesday announces a new partnership with Google. Ellison says the company would “love to do the same thing with AWS,” adding that he is optimistic that interconnection will become the status quo. Shares rise 9.3% to $135.35 after-hours.

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CFRA Maintains Hold Recommendation On Shares Of Oracle Corporation

/ / Technology /

We up our 12-month target to $150 from $142, on a P/E of 22x our CY25 EPS estimate of $6.80, above historical/below peers. We keep our FY25 (May) EPS at $6.29 and start FY26 at $7.08. ORCL posts May-Q EPS of $1.63 vs. $1.67, missing the $1.65 consensus. Sales rose 3%, as 20% growth from cloud services was largely offset by declines in licenses, hardware, and services. Infrastructure-as-a-Service (IaaS) grew +42%, now 14% of sales (run rate doubled in the last seven Qs) and is benefiting from large-scale deals (+30 AI sales contracts for over $12.5B; Open AI deal to train ChatGPT adds credibility). RPO rose an impressive 44% to $98B (+29% in Feb-Q), driving its backlog and will allow ORCL to grow +10% in FY25. Applications decelerated to 10% but Cerner headwinds to ease. The Google Cloud partnership is poised to aid database services revenue, which could add another

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