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It’s been another positive week for stocks, with back-to-back gains on Thursday and Friday more than offsetting Wednesday’s Fed-led decline. With Big Tech earnings dominating market movements, Wall Street analysts had a lot to say about our portfolio names. Here are his five key calls for this week. The same goes for our club. 1. Microsoft Wall Street’s Call: Following Microsoft’s earnings announcement after the closing bell on Tuesday, Barclays raised its price target for Microsoft from $421 per share to $475. This represents a 17.6% increase from Friday’s opening price. Analysts cited Microsoft’s artificial intelligence prospects as a tailwind. Even great quarters don’t always generate positive movement initially. Microsoft stock fell 2.7% on Wednesday, but ended the week strong, closing at another all-time high. MSFT YTD Mountain Microsoft’s (MSFT) Year-to-date Performance “We’re seeing AI really starting to have a positive impact on the numbers for MSFT. Azure’s 6% growth benefit in Q2 “Azure’s growth has yet to recover,” analysts who rate the stock a buy wrote in a Wednesday note. writing. “MSFT continues to be an exciting story, with more to come from Copilot and the potential for recovery.”Club view: Microsoft’s AI outlook drives much of our investment thesis. occupied. This week’s financial results highlighted not only the strengths of Azure, its cloud computing division, but also the power of AI. The Company looks forward to long-term monetization opportunities and recurring revenue streams from its generative AI tool, Copilot. Copilot is an add-on that helps users interact with the Office 365 suite. The price target has been raised from $400 to $450. 2. Alphabet Wall Street Calls: Goldman Sachs raised Alphabet’s 12-month price target after earnings to $171 per share from $164. This reflects a 21.3% premium to Friday’s opening bell. Goldman maintained its buy rating. Alphabet shares fell 7.5% on Wednesday, a day after printing late Tuesday that saw weak advertising. The stock rose modestly on Thursday and Friday, but remains below Monday’s all-time high close. GOOGL YTD Mountain Alphabet (GOOGL) Year-to-date Performance “Overall, the quarter saw stable/strong digital advertising and media consumption trends, segment-level operating margins and solid upside surprises at the segment-level. “We believe it is a combination of a series of messages with “there are some nuances regarding one-timers,” the analysts wrote on Wednesday. Club’s view: Given Alphabet’s weak performance, we raised our price target. The club maintained a rating on the stock at 2, which means we will be buyers on exit, and raised PT from $140 to $160 per share. The quarterly results released Tuesday night were strong in certain areas and shouldn’t have caused the stock to fall this much. Although we missed our advertising revenue targets, we are encouraged by the return to cloud profitability. Indeed, Jim Cramer was left pondering Friday whether he should own all of the Super Six’s tech stocks. He questioned Alphabet after Metaplatforms’ strong ad numbers. 3. Metaplatform Wall Street Calls: Metaplatform received a ton of price target hikes on Friday. Citi analysts, who rate the tech name a “buy,” each upgraded PT from $440 to $525 following the Knockout quarterly results released after Thursday’s bell. Meta stock rose more than 20% on Friday, hitting a new closing high. META YTD Mountain Meta Platform (META) Year-to-date Performance Citi cited “strengthening advertising markets” as a tailwind, adding “AI and product catalysts as revenue growth re-accelerates and profitability expands significantly.” will strengthen engagement.” Analysts said, “Meta’s fourth-quarter 2023 results and first-quarter outlook remain largely unchanged as increased engagement and broader advertising power accelerated revenue growth and significantly expanded margins. “All indicators exceeded expectations,” he added. The key here, they believe, is the “advantage of staying in the early stages of a multi-year product cycle.” Club’s Take: Meta had a rough quarter, so it’s no wonder analysts are bullish on its results. Investors also welcomed Facebook’s parent company’s decision to announce its first-ever dividend. I would like to pay attention to how the company will implement its efforts in artificial intelligence in the coming quarters. CEO Mark Zuckerberg seems serious about spending billions on high-performance Nvidia chips to keep the AI train moving in the meta. 4. Nvidia Wall Street Calls: Bank of America raised its price target on NVIDIA from $700 to $800 per share ahead of the company’s quarterly results later this month. NVDA YTD Mountain Nvidia’s (NVDA) Year-to-date Performance “We expect NVDA to maintain its lead in AI inference as well,” analysts wrote in a note Friday. “We forecast the data center AI accelerator market to grow from $43 billion in CY23 to over $160 billion by CY27E, likely with an even contribution from training/inference. We expect NVDA to hold a 90% share in training and achieve > 50% share in inference.” ”Club view: Wall Street continues to tank his Nvidia stock, and we don’t blame them. It’s hard not to be bullish on the chipmaker as the stock continues to hit new all-time highs. Friday was another record close. The company has maintained its dominance in graphics processing units (GPUs), which are high-demand cutting-edge chips used to run AI. As the club noted in Friday’s commentary, we expect to see Nvidia continue similar efforts as more companies begin to build out their AI infrastructure plans. 5. Costco Wall Street’s Call: Oppenheimer on Friday raised Costco’s price target to $760 per share to $695. Analysts maintained a buy rating on the stock, which closed Friday at a new all-time high. COST YTD YTD Yama Costco Wholesale (COST) Year-to-date Performance “COST’s proven ability to drive food share even in a low-inflation/deflation environment and improved outlook for non-food products provides fundamental We believe that momentum is poised to accelerate from here, which could ease comparability, ease inflation, and strengthen middle- and upper-income consumers.” wrote on Friday. Club’s Take: We’re pleased to see that analysts recognize the upward trend in Costco stock. This consumer retailer name continues to sell quality products at lower prices and encourages customers to sign up for new memberships. This also adds consistent income to the club’s holdings. The latest quarter brought us the special dividend we’ve all been waiting for. Another reason why the deadline has passed is the increase in membership fees. (Jim Cramer’s charitable trusts are long his META, NVDA, COST, GOOGL, MSFT. See here for a complete list of stocks.) Jim Cramer’s subscribers to his CNBC Investment Club As a trader, you will receive trade alerts before Jim makes a trade. trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
Traders work on the floor of the New York Stock Exchange (NYSE) on January 29, 2024 in New York City, USA.
Brendan McDiarmid | Reuters
It’s been another positive week for stocks, with back-to-back gains on Thursday and Friday more than offsetting Wednesday’s Fed-led decline. With Big Tech earnings dominating market movements, Wall Street analysts had a lot to say about our portfolio names. Here are his five key calls for this week. The same goes for our club.
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