Investing.com — Here are analysts’ biggest moves in artificial intelligence (AI) this week.
InvestingPro subscribers always get the first notification from market-moving AI analysts. Upgrade today!
The AI-powered iPhone 16 could kick off a super cycle for Apple: Wedbush
The AI-powered launch of the iPhone 16 in September could spark a significant growth phase for Apple (NASDAQ:) in the coming year, according to Wedbush analysts.
In a recent note, the investment firm predicted that initial iPhone 16 shipments could exceed 90 million units, surpassing initial market expectations of 80 to 84 million units and marking a double-digit increase year-over-year.
“We are seeing increasing evidence across the Asian supply chain that this iPhone upgrade cycle could be a historic cycle paving the way for a super cycle, as we currently estimate that approximately 300 million iPhones worldwide have not been upgraded in more than four years,” the analysts noted.
“We believe Apple could sell more than 240 million iPhone units in FY25 as this AI-driven upgrade cycle takes hold.”
The analysts also highlighted that China remains a crucial region for Apple’s growth, with the iPhone 16 expected to generate new momentum in this crucial market as the company heads into fiscal 2025.
Since the WWDC event in early June, optimism has grown within the Asian supply chain, with many anticipating that the iPhone 16 could herald a “golden upgrade cycle” for Apple, driven by pent-up global demand.
With the launch of Apple Intelligence, the market is beginning to recognize Apple’s potential to become the “gatekeepers of the consumer AI revolution,” Wedbush said.
Dell shares have been moved to Top Pick at JPMorgan
JPMorgan analysts named Dell Technologies (NYSE:) as their new top pick earlier this week, citing the company’s strong potential for long-term growth, particularly in the AI server market and traditional infrastructure sectors.
In a note to investors, JPMorgan reiterated its Overweight rating on Dell and set a new price target of $160 by December 2025.
The analysts noted that Dell’s shares lagged other AI-related stocks and the broader market, partly due to concerns about potential margin pressure in the AI server space. However, JPMorgan believes these concerns are overblown.
“The revenue opportunity for AI Server remains strong,” the analysts wrote, suggesting that estimates for the total addressable market (TAM) for AI servers are likely to rise as cloud investment forecasts are revised upward.
They further highlighted that as customer adoption accelerates, revenue growth is expected to boost profit margins, especially with a shift to smaller cloud and enterprise companies expected to lead AI server purchases after 2026.
In addition to AI servers, JPMorgan sees strong prospects for Dell in the traditional infrastructure and enterprise storage markets, with significant revenue and margin opportunities.
While AI PCs have yet to become a major driver of market expansion, the investment bank believes they can boost revenue in the near term through higher volumes and prices.
Wolfe Research downgrades Qualcomm
Wolfe Research downgraded Qualcomm (NASDAQ:) stock from Outperform to Peer Perform and removed its price target for the stock, citing growing concerns about the impact of Apple’s in-house modem on the chipmaker’s future earnings.
The analysts pointed out that Qualcomm had previously minimized the potential threat, but the landscape has now changed.
“It’s no surprise that AAPL is pursuing a modem,” Wolfe Research noted, noting that Apple’s past struggles led many to dismiss the possibility as a “boy who cried wolf” scenario.
However, Wolfe Research now indicates that recent checks indicate that Apple’s modem is indeed poised to enter the market, which could pose a significant challenge to Qualcomm’s business.
Qualcomm had previously indicated it would only supply modems to 20% of iPhone 18 models, but Wolfe analysts are now predicting a more substantial impact, starting with the iPhone SE in the spring and expanding with the iPhone 17.
By the time the iPhone 18 launches, Apple’s modem is expected to be in all phones outside the US
“Despite QCOM’s previous comments, we don’t think this fully fits Street estimates – we are adjusting our numbers accordingly,” analysts wrote.
The company estimates that this development could lead to a decline in revenue of $4 billion and earnings per share of $1.50 between 2024 and 2026.
While Qualcomm has made efforts to diversify, including a focus on AI handsets and IoT, Wolfe’s team remains cautious, suggesting these areas will be “harder to sell to investors.”
Wells Fargo downgrades Snowflake stock due to ‘meaningful’ narrative shift
Snowflake (NYSE:) stock also suffered a rating downgrade by Wells Fargo analysts on Thursday, sending shares lower in the pre-open market.
Wells Fargo downgraded Snowflake from Overweight to Equal Weight and lowered its price target from $200 to $130.
The analysts pointed to several growing challenges for the technology company.
“The story has changed meaningfully,” the investment bank’s analysts noted, highlighting concerns such as new management, increasing competition and uncertainties surrounding the company’s technological edge.
A recent data breach has also raised alarm, with the analysts noting that “several customers affected by the breach” are considering leaving Snowflake, including some high-value accounts. This could lead to customer churn, which would further complicate the company’s prospects.
The cut comes ahead of Snowflake’s second-quarter earnings report, which expects only modest quarter-over-quarter growth. Wells Fargo also expressed concern that new products may not yet be significantly accretive to the company’s results, potentially creating a “near-term air pocket for revenue growth.”
With Snowflake shares still trading at a premium, Wells Fargo sees limited upside potential in the near term, suggesting the stock is likely to “remain within range until stabilization becomes more apparent.”
Additionally, the analysts have lowered their revenue and earnings estimates for FY26 and FY27, adding to the cautious outlook.
Societe Generale identifies the ‘most vulnerable’ stock market to an AI trade reversal
In a recent report, analysts at Societe Generale identified Taiwan’s stock market as the most vulnerable to a reversal in AI trading.
They point out that Taiwanese stocks, especially in the semiconductor sector – a key component of the AI industry – are highly sensitive due to significant foreign ownership.
Foreign investors own more than 40% of the Taiwan stock market and are responsible for 80% of the average trading volume. However, since July, these investors have become net sellers, with outflows of $16 billion, reversing the positive trend of the first half of the year.
Societe Generale notes that this capital flight has been exacerbated by comments from former US President Donald Trump about Taiwan’s defense and chip industries, in addition to the broader global equity sell-off since July 31.
In contrast, foreign outflows in South Korea – another major player in the semiconductor market – were much lower, totaling only $300 million over the same period.
Concentrated foreign ownership in Taiwan’s semiconductor stocks, which make up more than 40% of the Taiwan Stock Exchange (TWSE) Index, makes the market particularly sensitive to shifts in global AI trading momentum, the bank’s analysts said.
Adding to concerns, Societe Generale also points out that domestic support has been lacking, with local dealers and proprietary trading desks also being net sellers, putting further pressure on the country’s stock market.
