Investing.com – Here are the biggest analyst moves in artificial intelligence (AI) this week.
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AI-powered iPhone 16 could usher in a supercycle for Apple: Wedbush
The AI-driven launch of the iPhone 16 in September could trigger a significant growth phase for Apple (NASDAQ:) next year, according to analysts at Wedbush.
In a recent announcement, the investment firm predicted that initial shipments of the iPhone 16 could exceed 90 million units, which would exceed initial market expectations of 80 to 84 million units and represent a double-digit year-over-year increase.
“We are seeing increasing signs in the Asian supply chain that this iPhone upgrade cycle could be a historic one, setting the stage for a super cycle, as we currently estimate that approximately 300 million iPhones worldwide have not been upgraded in over four years,” the analysts noted.
“We believe Apple could sell over 240 million iPhone units in fiscal year 2025 if this AI-driven upgrade cycle takes hold.”
The analysts also stressed that China remains a critical region for Apple’s growth and that the iPhone 16 is expected to provide new momentum in this important market at the start of the company’s 2025 fiscal year.
Since the WWDC event in early June, optimism has grown in the Asian supply chain, with many predicting that the iPhone 16 could usher in a “golden upgrade cycle” for Apple due to pent-up global demand.
With the launch of Apple Intelligence, the market is beginning to recognize Apple’s potential to become the “gatekeeper of the AI revolution for consumers,” Wedbush explained.
Dell shares included in top pick at JPMorgan
Analysts at JPMorgan named Dell Technologies (NYSE:) their new top pick earlier this week, citing the company’s strong potential for long-term growth, particularly in the AI server market and the traditional infrastructure sector.
In a note to investors, JPMorgan reiterated its “overweight” rating for Dell and set a new price target of $160 by December 2025.
Analysts noted that Dell shares have lagged other AI-related stocks and the broader market, in part due to concerns about potential margin pressure in the AI server space. However, JPMorgan believes those concerns are overblown.
“The revenue potential for AI servers remains strong,” the analysts wrote, suggesting that estimates for the total addressable market (TAM) for AI servers are likely to rise as cloud capital spending forecasts are revised upward.
They also emphasized that as customer adoption increases, revenue growth is expected to lead to higher profit margins, especially given the shift toward smaller cloud and large enterprises, which are expected to make most AI server purchases after 2026.
In addition to AI servers, JPMorgan sees good prospects for Dell in the traditional infrastructure and enterprise storage markets with significant revenue and margin opportunities.
Although AI PCs are not yet a significant driver of market expansion, the investment bank is convinced that they could increase sales in the short term through higher unit volumes and higher prices.
Wolfe Research lowers Qualcomm rating
Wolfe Research downgraded its rating on Qualcomm shares (NASDAQ:) from “Outperform” to “Peer Perform” and reduced its price target on the stock, citing increasing concerns about the impact of Apple’s internal modem on the chipmaker’s future earnings.
The analysts pointed out that although Qualcomm had previously downplayed the potential threat, the situation has now changed.
“It’s no surprise that AAPL is pursuing a modem,” noted Wolfe Research, noting that Apple’s past difficulties had led many to dismiss the possibility as a “boy who cried wolf” scenario.
However, Wolfe Research now points out that recent research suggests that Apple’s modem is indeed close to launch, which could pose a significant challenge to Qualcomm’s business.
Qualcomm had previously stated that it would only supply modems for 20% of iPhone 18 models, but Wolfe’s analysts now predict a stronger impact, starting with the iPhone SE in the spring and expanding with the iPhone 17.
By the time the iPhone 18 is launched, Apple’s modem is expected to be present in all phones outside the US
“Despite QCOM’s earlier comments, we do not believe this is entirely in line with Wall Street estimates – we are adjusting our numbers accordingly,” analysts wrote.
The company estimates that this development could result in a revenue loss of $4 billion and an EPS reduction of $1.50 between 2024 and 2026.
Although Qualcomm is trying to diversify its business, focusing on AI phones and IoT, among other areas, Wolfe’s team remains cautious, saying it will be “more difficult to communicate these areas to investors.”
Wells Fargo downgrades Snowflake shares due to ‘significant’ change in narrative
Snowflake (NYSE:) stock was also downgraded by analysts at Wells Fargo on Thursday, causing share prices to decline ahead of the market open.
Wells Fargo downgraded Snowflake from “Overweight” to “Equal Weight” and reduced its price target from $200 to $130.
Analysts pointed to several growing challenges for the technology company.
“The situation has changed significantly,” the investment bank’s analysts noted, citing concerns such as new management, increasing competition and uncertainty about the company’s technological lead.
A recent data breach has also raised alarm bells, with analysts noting that “several customers affected by the data breach” are considering leaving Snowflake, including some high-profile accounts. This could lead to customer churn and further complicate the company’s outlook.
The downgrade came ahead of Snowflake’s second-quarter earnings report, in which it expects only modest quarter-on-quarter growth. Wells Fargo also raised concerns that new products may not yet be contributing significantly to the company’s bottom line, potentially creating a “near-term bubble in revenue growth.”
With Snowflake stock still trading at a premium, Wells Fargo sees limited upside in the near term, suggesting the stock will likely “remain range-bound until more significant stabilization becomes evident.”
In addition, analysts have lowered their revenue and earnings estimates for fiscal years 26 and 27, further reinforcing the cautious outlook.
Societe Generale identifies the ‘most vulnerable’ stock market to an AI trading reversal
In a recent report, analysts at Société Générale identified the Taiwanese stock market as the market most vulnerable to a reversal in AI trading.
They point out that Taiwan’s stocks, particularly in the semiconductor sector – a key part of the AI industry – are highly vulnerable due to significant foreign ownership.
Foreign investors hold over 40 percent of Taiwan’s stock market and account for 80 percent of average trading volume. However, since July, these investors have become net sellers, with outflows reaching $16 billion, reversing the positive trend seen in the first half of the year.
Societe Generale points out that this capital flight was exacerbated by comments made by former U.S. President Donald Trump about Taiwan’s defense and chip industries, as well as the broader global equity sell-off since July 31.
In contrast, foreign capital outflows in South Korea, another major player in the semiconductor market, were significantly lower, amounting to only $300 million over the same period.
The concentrated foreign ownership of Taiwan’s semiconductor stocks, which account for over 40 percent of the Taiwan Stock Exchange (TWSE) index, makes the market particularly sensitive to changes in the dynamics of global AI trading, according to the bank’s analysts.
Adding to the concerns is Société Générale’s citing a lack of domestic support and the fact that local dealers and proprietary trading desks are also net sellers, further increasing pressure on the country’s equity market.
