CRM Upgrade, ServiceNow New Top Pick By Investing.com

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Here are the biggest analyst moves in artificial intelligence (AI) this week:

InvestingPro subscribers will always have first access to the opinions of market-moving AI analysts.

Morgan Stanley upgrades Salesforce from Wolfe

Earlier this week, Morgan Stanley analysts raised a recommendation for Salesforce Inc (NYSE:). Analysts see several vectors through which Salesforce can drive revenue growth, especially considering “muted” investor expectations.

“Low investor expectations and potential top upside drivers such as price increases, product bundling, and data cloud adoption constitute an attractive risk/reward for CRM. While the entry of GenAI apps may still be more than 12 months away, data cloud is likely to serve as a bridge to further growth in CY24,” Morgan Stanley analysts said in a note.

Wolfe Research analysts also increased their recommendation on CRM stock, seeing double-digit upside potential above consensus FCF.

UBS expects more AI-led growth next year

UBS analysts said generative AI stands out as a disruptive and potentially transformative technology with historical precedent for creating value in a variety of sectors across the innovation value chain.

The development of generative AI contributes to the creation of new hardware, whose functions take place on platforms managed by operators and supporters. The overall impact is framed as benefiting the wider economy, with wide-ranging positive effects across a range of sectors.

“Global AI demand is expected to increase from $28 billion in 2022 to $300 billion in 2027, according to Bloomberg Intelligence data,” said UBS Chief Investment Officer, Americas. “This is a compound annual growth rate of 61%.”

“Over that period, the Infrastructure segment is expected to grow by 38% and the Applications & Models segment is expected to grow by 139%. “We believe our estimates are at risk of rising as visibility into infrastructure spending improves and AI demand for applications expands.”

Morgan Stanley shares its list of favorite AI stocks.

Morgan Stanley analysts believe the AI ​​sector remains well-positioned, especially in the software stock landscape. The investment bank argues that the potential rewards from the significant and transformative impact of Generative AI (GenAI) outweigh investor expectations from strong stock performance in CY23.

However, analysts warn that despite the positive outlook, GenAI may not serve as a universal catalyst given the environment of longer enterprise product cycles and relatively limited IT budgets.

Stocks mentioned include Microsoft (NASDAQ:), Adobe (NASDAQ:), Snowflake Co., Ltd. (NYSE:), Salesforce, HubSpot Co., Ltd. (NYSE:) etc.

Macquarie launches GenAI themed basket

Macquarie analysts have introduced the GenAI Theme Basket to provide investors with more diverse exposure.

Analysts predict that 2024 will see an intensification of the way the digital and physical worlds converge into a single economic reality.

“We are preparing for a disruptive 2024 in software driven by GenAI, cybersecurity, digital data transformation and increasing macro risks.”

The basket of stocks includes Microsoft, ServiceNow Inc (NYSE:), Salesforce; mongoDB (NASDAQ:), CrowdStrike Holdings Inc (NASDAQ:), Power School Holdings Inc (NYSE:) and HubSpot.

ServiceNow was also named a Top Pick by Macquarie due to its ‘substantial’ GenAI product potential.

Monness Crespi Hardt is optimistic about Amazon’s AI opportunities.

Analysts at Monness Crespi Hardt maintained a positive outlook on Amazon.com Inc (NASDAQ:), judging it to be well positioned. Analysts reiterated a Buy rating on the stock, along with a $170 price target.

Analysts note that Amazon is nearing the end of its most challenging period of the year, highlighting the company’s ability to leverage its strengths in 2024. The investment firm expects Amazon’s near-term stock performance to be influenced by consumer-related data points. Spending during the holidays.

“We believe Amazon is well-positioned to benefit from digital transformation, leverage the cloud, innovate with AI, engage in new healthcare opportunities, and take advantage of a leaner cost structure,” the analysts said. .