Wed's Top Calls: Nvidia, Netflix, GM; Alphabet AI Leads, Nio at $5.40

Alphabet strengthens AI leadership at I/O event, analysts bullish with a $195 target; Nio upgraded by JPMorgan, stock surges.

By Alex P. Chase

5/15, 08:23 EDT
Apple Inc.
Alcon Inc.
Campbell Soup Company
Dell Technologies Inc.
General Mills, Inc.
General Motors Company
Alphabet Inc.
Netflix, Inc.
NIO Inc.
NVIDIA Corporation
Palo Alto Networks, Inc.
Tesla, Inc.
Exxon Mobil Corporation

Key Takeaway

  • Alphabet's AI leadership reinforced by Goldman Sachs, Oppenheimer, and Jefferies following I/O event; stock target at $195.
  • Nio upgraded to neutral by JPMorgan with a new price target of $5.40, despite a potential 6% decline.
  • Google's I/O highlights rapid AI tool deployment to compete with OpenAI, including updates to Gemini AI model and new search features.

Alphabet's AI Leadership Reinforced

Following Alphabet Inc.'s I/O developer event, analysts from Goldman Sachs, Oppenheimer, and Jefferies have expressed increased confidence in the company's position as a leader in artificial intelligence (AI). Goldman Sachs analyst Eric Sheridan emphasized Alphabet's strategic positioning in key end markets, driven by its AI/machine learning capabilities. The event featured updates to its Gemini AI model and new search features, including AI Overviews, which summarize answers to search questions. Sheridan reiterated a buy rating on Alphabet stock with a $195 per share price target. Oppenheimer's Jason Helfstein highlighted Alphabet's competitive stance, supported by its R&D budget, extensive data library, and focus on machine learning. Jefferies' Brent Thill noted that generative AI could expand Google's role in search. Alphabet's stock has seen a 22% increase in 2024.

Nio's Outlook Improves

JPMorgan upgraded Chinese electric vehicle maker Nio to neutral from underweight, with analyst Nick Lai citing an improving but still uncertain outlook for the company. The upgrade was influenced by potential Chinese government stimulus policies and Nio's battery as a service (BaaS) strategy, which has boosted sales momentum by lowering monthly rental fees. Lai raised his price target on Nio to $5.40 per share, anticipating a 6% decline over the next year despite a recent 48% surge in the stock price. Nio's stock rose more than 3% in premarket trading following the upgrade.

Google I/O Highlights AI Innovations

At its annual I/O developer conference, Google announced a range of AI products, from new search and chat features to AI hardware for cloud customers. The event showcased Google's rapid deployment of AI tools to compete with firms like OpenAI. Key announcements included updates to Google's Gemini AI model and the introduction of AI Overviews in Google Search. Google also revealed plans for its sixth-generation tensor processing unit, Trillium, available to Cloud customers in late 2024. These developments underscore Google's commitment to advancing AI technology across its services.

Alphabet's AI Event and Market Impact

Alphabet Inc.'s Google I/O developers conference was a pivotal moment for the company to demonstrate its AI capabilities amidst competition from Apple and Microsoft-backed OpenAI. The event, which followed a strong earnings report and a $70 billion buyback program, aimed to bolster Alphabet's leadership in AI. Despite past challenges with AI applications, the accelerated adoption of Alphabet's Gemini AI engine suggests significant growth opportunities. The conference's success in showcasing new AI features could reinforce Alphabet's position as a key player in the AI landscape.

Street Views

  • UBS (Bullish on Nvidia):

    "Net, we remain bullish and our price target remains $1150."

  • Bank of America (Bullish on Alphabet):

    "We continue to see Google as a net AI beneficiary and believe growing Gen-AI integrations should likely help drive higher usage and incremental spend across Search, Cloud and Workspace."

  • JPMorgan (Neutral on Nio):

    "Since Feb, NIO’s share price has been on a roller-coaster ride, falling 40% towards the trough in mid-April and then rebounding by a similar amount afterward."

  • Cantor Fitzgerald (Bullish on Tesla):

    "TSLA recently lowered its FSD [full-self driving] subscription purchase price to $8,000 (from $12,000) and also lowered its monthly subscription fee to $99/month (from $199), which we view as encouraging."

  • Deutsche Bank (Neutral on Six Flags):

    "Although we continue to have confidence that the planned merger with FUN will be consummated... Buy-rated FUN is our preferred way to gain access to the anticipated benefits of the transaction."

  • Wells Fargo (Bullish on Wave Life Sciences):

    "We initiate coverage of WVE at OW, $11 PT."

  • Wells Fargo (Bullish on Natera):

    "Following 1Q24 results, CTVA remains our top pick for 2024, with NTR rising to top fertilizer pick..."

  • KeyBanc (Bullish on Netflix):

    "Netflix’s crawl, walk, run progression into ads continues with its second upfronts. This week..."

  • TD Cowen (Bullishon Janus Henderson): > "We upgrade JHG to Buy from Hold... lift 12-month price target $3 to $37.”

  • TD Cowen(** Bullish **on TKO Holdings): > "Coming out of strong 1Q24 earnings... an attractive entry point"

  • Morgan Stanley(** Bullish **on Exxon): > "XOM trades at a ~55% discount... despite cash flow/sh growth 50% above the S&P"

  • Morgan Stanley(** Bullishly optimistic **on Palo Alto): > "We see a favorable setup into FQ3 results next week..."

  • Bernstein(** Neutral **on General Mills & Campbell Soup): > "Upgrading CPB and GIS ...second half volume improvement.”

  • Wolfe(** Neutral **on SunPower): > "SPWR is caught in meme craze.. going come back reality”

  • Morgan Stanley(Top Pick for Dell)

    "Our customer supply chain checks suggests DELL's AI server storage businesses are seeing more momentum than previously assumed; PT moves Street-high$152(from$128)."

-Stephens(***Best Idea ***for Cheesecake Factory)

" We are naming The Cheesecake Factory(CAKE)our Best Idea restaurant coverage."- Barclays(***Overweight ***General Motors) "Unpacking GM EV losses – path improved profitability still “show me” story..."- Truist(***Buy ***Integer Holdings) "Initiating w/ Buy ITGR one largest med device outsource manufacturers(MDO)& unique SMID given:(1)high-teens EPS growth prospects;(2)rising exposure emerging product cycles across MedTech.”- Oppenheimer(***Outperform ***Alcon) " We upgrade shares ALC Perform Outperform$103PT."- Bank America(****Buy ****Apple ) "As look forward WWDC key questions are (1)Will Apple pick OpenAI Google cloud based AI both,(2)how economics work between companies,(3)will Apple change economics Google what monetization model AI across devices apps subscriptions.”