Microsoft’s Growth Soars With AI Innovations, Projected to Lead in Public Cloud by 2032: Analyst

/ / Technology /

Morgan Stanley analyst Keith Weiss maintained Microsoft Corp (NASDAQ:MSFT) with an Overweight and raised the price target from $465 to $520. Weiss highlighted that as investors hone in on the Generative AI cycle and look to identify assets able to monetize and compound the benefits of these innovations, he extended his discrete Microsoft forecast to 5-years, highlighting the durable EPS story enabled by their strong secular positioning. Weiss expected Microsoft’s leadership position for multiple secular growth trends to translate into a 14% revenue CAGR and 16% EPS CAGR through fiscal 2029. Weiss noted that Microsoft’s improving positioning for Public Cloud drives an increasing share of the overall IT wallet, as evidenced by Microsoft Commercial revenues gaining 3.5% points of share within IDC’s overall software market estimates over the past five years. The analyst noted that more robust positioning for Enterprise PaaS workloads should enable Azure to take the market share lead in Public […]

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Apple Eyes Higher Profitability, Premium Mix and In-House Technologies Drive Margin Boost: Analyst

/ / Technology /

BofA analyst Wamsi Mohan maintained a Buy rating on Apple Inc (NASDAQ:AAPL) with a price target of $225. Mohan noted that historically, Apple investors have tended to look at existing products and the profitability associated with those products and services to measure the company’s future performance. He went back to 2018 to see where the 2023 consensus gross margins were in 2018. The Street was modeling fiscal 2023 gross margins for Apple at 39%, but Apple printed 44% gross margins, significantly exceeding (500bps) original expectations. Mohan noted that the Street continues to underestimate Apple’s long-term gross margin potential across both products and Services yet again. He emphasized about 180bps of Product gross margin upside and about 150bps of Services margin upside over the next few years. He noted that Apple’s gross margins are headed significantly higher, driven by an increased mix of services within the overall portfolio, which should account for about 60bps

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ServiceNow Likely to Benefit From Customer Market Growth, Oppenheimer Says

/ / Technology /

ServiceNow (NOW) has a large growth opportunity in the customer market, Oppenheimer said in a note Thursday following a recent interview with a “large” ServiceNow partner. “Customer workflows are time-consuming and manual, requiring updating records, exchanging spreadsheets, and other processes,” Oppenheimer said. “In our view, the opportunity is ripe for ServiceNow to disrupt this market by leveraging AI and its integration architecture to help organizations maintain records and service needs in real-time.” The ServiceNow partner experienced robust business activity and pipeline momentum in Q1, according to the firm. “ServiceNow remains well positioned to leverage its position as a leading enterprise integration engine and impresses us with its technology-vision and execution,” Oppenheimer said. Oppenheimer maintained ServiceNow’s outperform rating and $825 price target.

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Nike Stock Jumps On Upgrade To Buy As Analyst Says It’s ‘Time To Just Do It’

/ / Consumer Discretionary /

Nike Inc (NYSE:NKE) shares are trading higher Thursday following an upgrade from BofA Securities. What Happened: BofA analyst Lorraine Hutchinson upgraded Nike from Neutral to Buy on Thursday and raised the price target from $110 to $113, noting that “it’s time to just do it.” Full-year earnings estimates for Nike have fallen 35% over the last two years. When paired with the fact that the stock is trading at 10-year lows on a price-to-earnings basis, BofA believes it’s time to buy. “We are upgrading Nike to Buy (from Neutral) as estimates finally look achievable, Nike is taking bold steps to transform, and the stock sits at a 10-year trough relative P/E,” the analyst said in a new note to clients. Hutchinson sees mid single-digit revenue growth ahead with margin expansion. Based on this outlook, the valuation looks “compelling,” she said. Nike also has catalysts ahead including the company’s first investor day in seven years

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CFRA Maintains Buy Opinion On Shares Of Apple Inc.

/ / Technology /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Shares are up 4%, partly reflecting a Bloomberg report citing AAPL is looking to revamp its entire Mac line-up with its next generation M4 processors (M3 launched late last year), in an effort, we believe, to offer on-device AI. We view this as a positive development as it could offer upside to pricing and revenue within Macs, as the M3 injected a minimal performance boost. We think the news also suggests that AAPL is poised to unveil a slew of AI tools to developers at its WWDC this June. In our view, AAPL is looking to generate higher revenue by injecting new on-device AI capabilities across iPhones and other higher-end devices to spur consumers to pay up this fall. Separately, AAPL is set to refresh its entire

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Tesla and Nvidia Could Be a Match Made in AI Heaven — Barrons.com

/ / Consumer Discretionary / ,

Whether Tesla is just a car company or something more could mean trillions of dollars in stock market value for both the EV maker and Nvidia. “Tesla remains fiercely debated as it faces earnings pressure…and the business model crosses the chasm from autos towards [artificial intelligence] and robotics,” wrote Morgan Stanley analyst Adam Jonas in a Thursday report. Pressure is an understatement. Tesla is expected to earn about $2.70 a share in 2024, while two years ago, the consensus call was $6.40 a share. More electric-vehicle competition, higher interest rates, and an aging product lineup have made selling Teslas much harder. That is why analysts focused primarily on the car business are bearish on Tesla stock. “It’s hard for a car company to not be a car company,” wrote Bernstein analyst Toni Sacconaghi in a recent report, calling the auto industry hypercompetitive and noting that AI breakthroughs can eat away

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Alphabet’s Google Cloud to Invest $1 Billion in Digital Connectivity to Japan

/ / Technology /

Alphabet’s (GOOG, GOOGL) Google Cloud said in a blog post that it will invest $1 billion in digital connectivity to Japan to support Google’s Japan Digitization Initiative and improve digital connectivity between the US, Japan and other Pacific Island territories. The investment will fund the expansion of Google’s Pacific Connect initiative, which covers Australia and French Polynesia, and the addition of two new subsea cables to establish new fiber-optic routes between the US and Japan, the company said. Google Cloud said it will collaborate with partners such as KDDI, ARTERIA, Citadel Pacific, and the Commonwealth of the Northern Mariana Islands on the planned subsea cables. No timeline was disclosed for the initiative.

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Tesla Stock Is Down Again. Where the Charts Say It Goes Next. — Barrons.com

/ / Consumer Discretionary /

Tesla stock is set to drop for a second consecutive day, as investors balance weak sales data and hope from CEO Elon Musk. Early Thursday trading, brings key technical support back into view. Tesla stock was down 0.9% in premarket trading at $170.28 while S&P 500 and Nasdaq Composite futures were down about 0.3%. Telsa stock finished 2.9% lower on Wednesday, along with many other auto stocks, after the March inflation report showed prices rose faster than expected, hurting chances for Federal Reserve interest rate cuts later in the year. Tesla investors also had to digest weak sales data coming from China. Sales in the first week of April amounted to just 1,880 units, down 89% week over week and down 86% month over month, according to industry data tracked by Citi analyst Jeff Chung. In March, the electric vehicle giant sold about 62,000 vehicles in China, or about 4,800

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