JPMorgan sees significant downside risk in Tesla stock by Investing.com

Investing.com — Here are the biggest artificial intelligence (AI) analyst moves for the week.

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Mizuho sees Apple stock as ‘long-term bearish’

Mizuho office analysts said on Friday that they view Apple Inc (NASDAQ: ) shares as a “long-term downside,” noting that negative headlines and concerns about declining iPhone sales have already factored into the price.

They expect iPhone sales for fiscal 2025, especially the iPhone 16, to remain relatively flat, forecasting single-digit declines year over year, better than many fear.

According to analysts, after a difficult period until March 2025, Apple shares could bounce back, following the preview of a new iOS in June and the release of a more AI-integrated iPhone 17 in September 2025.

“Patience will be rewarded, short-term downside risk (is) limited as super negative and short on the buy side,” analysts commented.

The team at Mizuho now anticipates a 6% decline in iPhone production for 2024, revising its estimate to 220 million units, down from a previous forecast of 90 million for the iPhone 16 model.

Despite the downgrade for 2024, they project a comeback in 2025, with unit sales expected to rise 8% to 239 million. This growth would be supported by the introduction of a new iPhone SE and the expected launch of the iPhone 17.

Looking ahead, the forecast for 2026 suggests that iPhone sales could reach around 250 million units.

Analysts also estimate that Apple’s upcoming iPhone 17 will sell around 97 million units in 2025, which is a 10% increase from the revised estimate for the iPhone 16. Moreover, they predict that Apple will start to use its own internal modem chips with the iPhone 18. , phasing out Qualcomm (NASDAQ: ) modems until the iPhone 18 is released.

Apple is also expected to introduce a foldable iPhone in 2027, which could spur further investment in the G6’s OLED panels. Mizuho’s team believes that new AI features in iOS could drive stronger upgrade and replacement cycles starting with iPhone 17.

“Feedback from shopping couldn’t be more negative about the AAPL and iPhone supply chain,” the analysts continued.

“It feels like a lazy and very crowded short, where CY25 iPhone buying unit estimates are likely expecting negative single-digit unit growth year-over-year versus the sales consensus, which was an increase of 5% and now probably flat year over year. .”

Investors May Question Tesla’s Growth Stock Status: JPM

JPMorgan issued a warning note on Tesla Inc (NASDAQ: ) on Thursday, adjusting its price target, still predicting a potential significant downside for the stock.

The bank maintained its Underweight rating on Tesla but raised its price target from $115 to $130. Still, the new price carries a downside risk of nearly 50% from Tesla’s last closing stock price.

“TSLA shares fell -3.5% on Wednesday versus the S&P 500, apparently after the release of sales and production numbers that indicated global 3Q shipments were slightly less than our estimates and in line with the Bloomberg consensus, but , from our conversations, may have accounted for more. of a miss to investor expectations,” JPMorgan said.

JPMorgan also warned that Tesla could post its first full-year unit volume decline, which could threaten the bullish rating.

Tesla’s third-quarter deliveries of 464,000 units slightly missed JPMorgan’s estimate but matched the Bloomberg consensus forecast. However, analysts believe the numbers may have underperformed broader investor expectations.

“The continued weaker trend now appears to position Tesla to not grow full-year unit volumes for the first time in its history,” JPMorgan explained, suggesting that this could cause investors to reconsider their position on Tesla as a growth stock.

The report highlighted Tesla’s resilience in the stock market despite deteriorating performance over the past two years.

“While TSLA stock has been flat or slightly higher over the past two years, expectations have collapsed for every performance measure,” the note points out, citing declines in unit volumes, revenue, gross margin and free cash flow.

Analysts also pointed out that Tesla’s earnings before interest and taxes (EBIT) for 2024 are now forecast at $7.3 billion – a sharp 74% drop from the $28 billion projected last year two years for the same period.

Upcoming AI event may ‘reinvigorate’ AMD stock: BofA

Analysts at Bank of America (BofA) reaffirmed their buy rating on shares of Advanced Micro Devices Inc (NASDAQ: ) ahead of the company’s “Advancing AI” event on October 10.

Analysts noted that AMD’s previous AI event on Dec. 6 led to significant stock gains of 19% and 80% over the next month and three months, respectively, outperforming the Philadelphia Semiconductor Index’s 10% and 37% gains in the same periods. .

The upcoming event is expected to include roadmap updates in AI and server CPU, along with comments from key cloud customers, which “could reinvigorate AMD stock,” analysts said. AMD is up a modest 9% year-to-date (YTD), trailing the 22% rise in the SOX index.

Despite growing competition in the AI ​​accelerator market, BofA highlighted AMD’s potential to expand its market share. Consensus estimates that AMD’s AI sales will reach $5.1 billion in 2024, with the possibility of doubling to $10 billion in 2025.

The current consensus for AMD’s AI sales in 2024-2026 is $5.1 billion, $9.7 billion, and $12.8 billion, respectively, suggesting that AMD’s market share in AI accelerators will probably stay around 5-7%. That’s significantly less than its more than 20% market share in consumer CPUs and gaming GPUs.

Although AMD has made strides in artificial intelligence, BofA analysts warned that further expansion of market share may be difficult given NVIDIA Corporation’s (NASDAQ: ) more than 80-85% market share and strong presence in cloud, along with cost-optimized custom competition. ASICs from companies like Broadcom (NASDAQ: ) and Marvell (NASDAQ: ).

However, if AMD demonstrates a viable strategy to capture more than 10% of the AI ​​market share by 2026, it could add about $5 billion in sales, with potential earnings per share (EPS) in the range of 8 -$9, compared to the current consensus of $7.37.

“Faster growth could also help AMD revalue to 30-55 times the long-term price-to-earnings (PE) ratio it’s been able to trade at during previous periods of rapid stock gains and year-over-year growth of sales of more than 40%,” BofA analysts said.

“We expect AMD to sharpen its bottom-line positioning, including recent acquisitions (ZT Systems, Silo AI), open source software (ROCm), and networking (infinite fabric),” they added.

SMCI is still a “$1,000 stock,” says Loop Capital

Analysts at Loop Capital reiterated their bullish outlook for Super Micro Computer Inc (NASDAQ: ) this week, maintaining a Buy rating and saying the stock is still on track to reach $1,000 (pre-10 for 1 stock split), in despite the recent news. of a US Department of Justice (DOJ) investigation.

In their note, Loop Capital downplayed the importance of the DOJ investigation, which was first reported by The Wall Street Journal.

Analysts speculated that the investigation likely relates to shipments to countries such as China and Russia, but stressed that it was unlikely to affect Super Micro’s ongoing operations.

“SMCI could continue to do what it needs to do to file the 10-K while handling anything with the DOJ separately,” the analysts wrote.

They also pointed out that Super Micro may already have known about the DOJ probe. While the company has yet to publicly acknowledge the investigation, Loop Capital noted that management appeared “constructive” during recent investor events in September, suggesting the AI ​​server maker may already be addressing the situation.

“We believe there is a legitimate possibility that SMCI was already aware of whatever might now be happening with the DOJ,” the analysts added.

Loop Capital remains bullish on Super Micro’s long-term prospects, projecting normalized revenues of $40 billion, with a return to gross margins of 14% and operating margins of 10%.

Analysts say these fundamentals could result in normalized earnings per share (EPS) of $50 and a price-to-earnings (P/E) multiple of 20x, supporting their view that SMCI is “a $1,000 stock” .

Northland upgrades Salesforce stock to Buy

Northland Capital Markets upgraded Salesforce Inc (NYSE: ) to outperform following the release of Agentforce, a platform that integrates Agentic AI technology.

Northland points out that Agentforce has not only matched Microsoft’s advances in AI, but may have surpassed them in terms of AI evolution. Officially launched on September 12, the platform enables the deployment of GenAI agents in sales, service, marketing and commerce workflows.

Agentforce is powered by the Atlas reasoning engine and the xLAM series of high-action models. This technology eliminates the need for coding to build agents on the platform.

In addition, the system’s ability to transfer tasks to human agents when faced with complex or ambiguous scenarios is seen as a key innovation, ensuring high levels of relevance and accuracy in its autonomous agents.

Northland Capital Markets also mentioned the platform’s pricing model, which is based on consumption and averages $2 per conversation. This structure is designed to capture some of the value that GenAI provides to customers.

Analysts expect this development to significantly expand Salesforce’s total addressable market (TAM) for software from $0.8 trillion to $3.2 trillion, representing a fourfold increase.

“We believe CRM is well positioned to leverage more than the 4x in software TAM that we expect GenAI to drive,” the Northland team wrote in its report.

The firm extended its discounted cash flow (DCF) forecast from 8 years to 13 years, showing confidence that Salesforce is no longer constrained by average revenue per user (ARPU) limitations.

As a result, Northland Capital Markets raised its 12-month price target for Salesforce to $400 from $270.