A recent analysis by financial experts suggests that companies benefiting from artificial intelligence (AI) are likely to see continued outperformance in the year 2024. Goldman Sachs highlights Arista Networks and Dell Technologies as top picks in this regard.
Goldman Sachs analysts predict that Arista Networks will benefit from the accelerating capital expenditure growth of its key hyperscale customers, such as Microsoft and Meta. Additionally, the company’s milestones that support Ethernet as an AI networking fabric further contribute to its potential success.
Dell Technologies, on the other hand, is expected to experience growing demand for AI servers as infrastructure investments extend beyond hyperscale providers to AI cloud service providers and eventually reach the enterprise market.
While some analysts express mixed opinions about NVIDIA Corporation, Bank of America maintains it as a top pick in the chip sector. The bank’s analysts highlight NVIDIA’s “genAI dominance” as a crucial factor that could generate around $100 billion of incremental free cash flow over the next two years.
However, DA Davidson analysts offer a more neutral perspective on NVIDIA stock, initiating research coverage with a Neutral rating and a $410 per share price target. They do not anticipate the same level of investment in generative AI beyond 2024.
Morgan Stanley analysts discuss the development and implementation of AI regulation in the United States. They believe that it will take years to implement enforceable regulations due to resource constraints at the federal agency level and asymmetrical information between the government and industry.
Meanwhile, two major AI beneficiaries from 2023, MongoDB and Palantir Technologies, saw their ratings downgraded this week. UBS downgraded MongoDB due to a lack of material database revenue from AI workloads. Jefferies downgraded Palantir, citing concerns of an overinflated valuation due to AI hype without a clear monetization strategy.
Finally, William Blair analysts initiated research coverage on UiPath, an AI-focused company specializing in workflow automation and process optimization. They expressed confidence in UiPath’s ability to deliver durable growth and expanding margins over the next few years.
Overall, while certain AI beneficiaries face rating cuts or mixed opinions, the analysis suggests that the AI sector as a whole is poised for continued growth and success in the coming year.
The source of the article is from the blog macholevante.com