Nvidia remains top pick for 2025 despite challenges, Micron and Oracle downgraded

From Investing.com: 2024-12-22 03:44:55

Morgan Stanley reaffirms Nvidia as top pick for 2025 with $166 price target, despite near-term challenges. Analysts expect Blackwell strength to dominate by second half of 2025, favoring GPUs over ASIC solutions. Nvidia’s $12 billion R&D investments crucial for AI hardware innovation and addressing industry challenges like AGI clusters.

Barclays labels Tesla as “narrative king” with 90% rally post-election, driven by AV and AI narratives. Stock surge disconnected from fundamentals, reflected in elevated P/E ratio. Retail investor interest and “Elon premium” contribute to valuation. Tesla remains a meme stock with strong momentum.

Micron downgraded by BofA after weak guidance, citing NAND pricing challenges. Q2 revenue and GM outlook below estimates, impacting stock performance. Positive outlook on HBM and AI markets despite pricing pressure. Potential for recovery in PC and phone markets in second half of 2025.

Oracle downgraded by Monness on valuation concerns, aggressive capex plans. Rising competition and growth challenges highlighted post-Q2 earnings. Capex doubling in FY25 to $14.2 billion, putting pressure on FCF margin. Leveraged balance sheet limits growth opportunities and shareholder returns.

BofA outlines 2025 semiconductor outlook, projecting 15% industry sales increase. Memory and core semiconductor growth expected, with focus on AI semis in first half of 2025. Top picks include Nvidia, Broadcom, and Marvell Technology for AI leadership. Lam Research, ON Semiconductor, and Cadence Design noted for recovery and growth potential in 2025.



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