Technology

ASML, ASM, VAT Group Stocks Look Undervalued

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Front-end semiconductor stocks–those focused on wafer fabrication–deserve to trade at a premium, Jefferies analysts write in a research note. The U.S. bank expects ASML Holding, ASM and VAT Group to see significant growth in the next 12 to 15 months driven by the structural growth outlook from rising capital-expenditure intensity, a lack of meaningful competition, strong cyclical drivers into 2025 and healthy cash returns. “While investors are concerned on the sharp rerating that has already occurred for many front-end semicap equipment names, we predict all three stocks to trade above the previous peak multiples and–for the reasoning above–expect further rerating to occur,” Jefferies says. ASML shares are up 1.8% at EUR915.30; VAT shares are up 0.1% at CHF484.70; ASM shares are up 2.1% at EUR588.0.

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Google Preparing New In-House AI Chip

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Alphabet’s Google is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. Google is preparing a new AI chip called Axion, which is the type of chip commonly used in big data centers, and can handle everything from YouTube advertising to big data analysis. Axion adds to Google’s efforts to develop new computing resources, beginning with specialized chips used for AI work as it tries to deal with rising artificial-intelligence costs. Dow Jones & Co. owns Factiva.

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Most of the Magnificent Seven Look Set for Strong Earnings — Barrons.com

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The first quarter was a blockbuster for stocks. First-quarter earnings could notch a big win, too. The S&P 500 reached 22 record closes in the first quarter, putting it up more than 10% for the first three months of the year. That’s only the 11th time that the index has rallied more than 10% in the first quarter since 1950. Many of the same factors that propelled investor optimism, like encouraging economic data, is also fueling high expectations for corporate earnings, particularly for the highflying tech sector. Big banks kick off first-quarter earnings at the end of the week, and while there are likely to be some pockets of weakness, companies may be able to largely live up to investors’ hopes. Analysts are certainly upbeat about big tech. As DataTrek Research co-founder Jessica Rabe notes, all of the Magnificent Seven megacap tech companies except Apple and Tesla have seen consensus

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Alphabet Hits New High

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Alphabet shares surged to an all-time high after The Wall Street Journal reported Google is making more of its own semiconductors, preparing a new chip that can handle everything from YouTube advertising to big data analysis as the company tries to combat rising artificial-intelligence costs. The Technology Select Sector SPDR ETF ended up 0.5%.

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Nvidia Stock Is Stuttering. A Bear Makes the Case for a Steeper Fall. — Barrons.com

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By Adam Clark Nvidia was slipping early on Tuesday. The chip maker’s stock is down from recent highs and one analyst says a sharper fall is on the way. Nvidia shares were down 0.6% at $865.91 in premarket trading. The stock closed down 1.0% at $871.33 on Monday. The stock has dipped following an initial spike in the wake of the company’s GTC developers’ event when it unveiled its new range of Blackwell chips. It is now slightly lower than before the conference started. While consensus estimates call for demand for Nvidia’s graphics-processing units to power artificial-intelligence technology to be strong this year, the expectation is for growth to slow from 2025 onward. D.A. Davidson analyst Gil Luria has a Hold rating on Nvidia stock and a $620 target price, which is among the lowest by any Wall Street analyst. He argues that major AI chip customers such as Amazon.com

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Apple’s China Headwinds Persist, But Reasons to Be Bullish Remain

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Apple is facing one of the more difficult China demand environments Wedbush has seen in the last five years, but there are still a few reasons to be bullish, say analysts in a research note. The iPhone maker is contending with competitor Huawei gaining market share, geopolitical tensions that’s created a difficult selling environment, but Wedbush says current iPhone estimates for 2024 “remain hittable with 2025 Street estimates conservative.” The analysts also say the services business remains solid and artificial intelligence is “finally coming to Apple,” with a major AI announcement expected at the Apple Worldwide Developers Conference in June.

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Look Out, Super Micro – Dell Is Gaining Steam, and Its Stock Could Keep Soaring

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An analyst sees Dell getting more competitive with its rival Shares of Dell Technologies Inc. are near record territory, and one analyst sees plenty of reasons why their momentum can continue. Melius Research’s Ben Reitzes thinks Dell (DELL) is picking up market share in servers – and has room to keep doing so as it receives more graphics processing units from Nvidia Corp. (NVDA), gains more traction with its liquid-cooling offerings and becomes more competitive at winning larger customers. While Dell shares are up 217% in the past year in large part due to traction for its servers that meet artificial-intelligence use cases, rival Super Micro Computer Inc. (SMCI) has seen its stock jump more than 800% in that span. Reitzes thinks Dell can improve its positioning in the eyes of customers and investors. “Signs point toward Dell having won more orders from Tier 2 clouds and amajor private AI

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Apple to Cut 600 Jobs in California. Why It’s a Wake-Up Call. — Barrons.com

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By Callum Keown Apple plans to lay off more than 600 workers in California, weeks after scrapping its electric car and smartwatch display projects. The tech giant filed a number of notices to the state detailing the planned job cuts, Apple’s first significant layoffs since the pandemic. The workers, based across eight offices in Santa Clara, were told on March 28 and the layoffs are effective from May 27, according to the filings. While it’s not clear which projects the layoffs relate to, Santa Clara was home to the company’s secretive car project and next-generation screen development, Bloomberg reported. The closure of both projects in recent weeks is a blow to Apple and makes the success of its next big idea even more crucial — particularly as its looks to develop its artificial-intelligence credentials. The stock has been under pressure this year and Apple may need an AI innovation to

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Dan Ives Says This Will Be The ‘Catalyst’ For 15% Rally In Tech Stocks In 2024: ‘Google Here Could Ultimately Have $30-$40 Upside’

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Wedbush’s Dan Ives thinks that a culmination of the AI revolution and improving ad spending will make the March quarter “one to watch” for companies in the technology sector. What Happened: Ives expressed optimism about the prospects of big technology companies in the March 2024 quarter. “I think it’s going to be one for the ages in terms of digital advertising,” Ives explained, underscoring that Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google is his top pick for this reason. Ives thinks that the spending environment in the tech industry is improving. This will help us see the next part of the “AI revolution,” according to Ives. “Big Tech earnings should be robust for 1Q and an important moment to put fuel into this tech rally with earnings/growth moving higher,” Ives said in an interview with CNBC. Ives has been consistent in his belief that the next phase of the AI revolution is the demand of AI and cloud

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