Wednesday's Market Insights: Leading AI Recommendations by Bernstein, JPMorgan Elevates Software Stock in Analyst Calls

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Investing / Wednesday, 08 November 2023 16:34

"Wednesday’s Analyst Calls: AI Recommendations Shine with Bernstein's Top Play, JPMorgan Boosts Datadog; Tech Focus Amid iPhone Sales Concerns and Software Surges

This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest post.

Tech Focus: Analysts placed tech under the spotlight on Wednesday. UBS expressed concerns about iPhone sales as wait times for new models decreased year over year, signaling a potential slowdown. On a positive note, JPMorgan upgraded software stock Datadog to overweight after a robust 28.5% rally, driven by better-than-expected Q3 earnings.

AI in the Spotlight: Bernstein highlighted Adobe as a top AI play, anticipating significant revenue and profit from AI starting next year.

• Cava's 'Very Impressive' Earnings Beat: Wall Street analysts foresee continued growth for Cava after the Mediterranean restaurant chain reported impressive Q3 earnings, exceeding expectations. Morgan Stanley and Baird expressed confidence in Cava's performance, focusing on strong sales growth.

• Piper Sandler Downgrades First Guaranty Bancshares: The profitability outlook for regional bank First Guaranty Bancshares prompted Piper Sandler to downgrade shares to underweight. Challenges in core expenses and revenues led to a 4% premarket decline.

• Cantor Fitzgerald Downgrades Lucid: Lucid faced a downgrade from Cantor Fitzgerald after a disappointing Q3 report, citing production cuts and negative gross margins. Analysts expressed concern about Lucid's short-term prospects in the face of industry demand slowdown.

• Mizuho Turns Neutral on Datadog: Following Datadog's impressive Q3 performance, Mizuho downgraded the cloud stock to neutral, citing limited room for further rally and increased competition.

• AllianceBernstein Benefits from Fixed Income Rebound: Bank of America remains bullish on AllianceBernstein, anticipating strong inflows in 2024 amid a fixed income rebound. The analysis emphasizes the company's exposure to fixed income and untapped synergies with Equitable Holdings.

• Buy Microchip Technology: Citi recommends investors take advantage of Microchip Technology's discounted trading price, upgrading the stock from neutral to buy. Improved debt metrics and reduced tax burdens contribute to the optimistic outlook.

• Morgan Stanley's Confidence in Toast: Despite falling short of Q3 expectations, Morgan Stanley maintains an overweight rating on Toast, citing confidence in the restaurant payments software company's annual recurring revenue growth and margin expansion.

• Carlyle Group Shares 'Simply Too Cheap': Oppenheimer sees value in Carlyle Group shares, deeming them undervalued despite this year's underperformance. The analysis highlights the embedded value in the stock and positive factors like net accrued performance fees.

• Adobe as a Top AI Play: Bernstein identifies Adobe as a frontrunner in leveraging AI for bottom-line impact, expecting the company to generate meaningful revenue and profit from AI starting next year. The price target is raised to $660 per share.

• TD Cowen Downgrades Estee Lauder: Due to consumer weakness in China and mixed travel and retail trends, TD Cowen downgrades Estee Lauder to market perform, citing lowered FY25 EPS guidance.

• Goldman Says Quanta Services Sell-Off Creates Buying Opportunity: Goldman Sachs upgrades Quanta Services to buy, emphasizing the utility investment in power grid modernization and the stock's recent pullback as a buying opportunity.

• Wall Street Analysts Cautious on Rivian: Despite a positive production forecast, several Wall Street analysts express caution on Rivian, citing challenges in modeling capex and cash flow. The stock's recent rally is viewed against a 'murky' outlook.

• JPMorgan Upgrades Datadog: JPMorgan upgrades Datadog to overweight after the cloud stock's strong Q3 results and upward guidance. Analysts acknowledge Datadog's position as a leading monitoring platform, despite valuation challenges.

• iPhone Wait Times Down, UBS Says: UBS notes a significant decrease in wait times for new iPhone models, raising concerns about a potential sales slowdown. The analysis suggests heightened competition in key markets affecting demand.

The live coverage provides real-time updates on analyst calls and market insights. Please refresh regularly for the latest information."

In conclusion, Wednesday's analyst calls and market highlights underscore a dynamic day in the tech sector, with mixed sentiments toward industry giants. Concerns over iPhone sales and potential market slowdowns contrast with positive shifts, such as JPMorgan's endorsement of Datadog and Bernstein's recognition of Adobe as a key player in artificial intelligence. The market landscape reflects a nuanced view on individual stocks, from bullish opportunities in AllianceBernstein and Microchip Technology to caution surrounding companies like Lucid and Rivian. As Wall Street navigates a complex web of earnings reports and industry dynamics, investors are advised to stay vigilant, seizing opportunities presented by undervalued assets and approaching potential challenges with strategic foresight.