Seeking Alpha analysts have upgraded Nvidia (NVDA) and Alibaba (BABA), emphasizing their strategic positions in the AI and e-commerce sectors, respectively. Conversely, Microsoft (MSFT) and Eli Lilly (LLY) face downgrades due to potential challenges despite strong growth metrics.
Upgrades
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Nvidia Corporation (NVDA): Upgrade to Buy by JR Research. Nvidia’s substantial gains in AI infrastructure and strategic positioning in the market are credited for its upgrade, reinforcing its bullish outlook amid fears of an AI bubble.
“The AI infrastructure race is expected to hit the $3T to $4T mark, with GPUs and networking infra estimated to comprise >50% of a typical data center… If there’s one company that’s expected to mint solid free cash flow margins, it is Nvidia. Who else?”
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Alibaba Group Holding Limited (BABA): Upgrade to Buy by JR Research. Analysts highlight Alibaba’s resilience in the e-commerce sector coupled with its growing AI initiatives that promise further growth and recovery amid geopolitical tensions.
“The uptick in fortunes linked to Alibaba’s AI initiatives has helped rejuvenate its fortunes not just in cloud intelligence but also in high-value e-commerce. Therefore, it has positioned Alibaba favorably, proving to investors that it can monetize its AI investments, lifting the market’s confidence in management’s decision to lift CapEx to a higher level.”
Downgrades
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Eli Lilly and Company (LLY): Downgrade by Oliver Rodzianko. Despite recent gains, the stock faces volatility concerns, prompting the analyst to trim the position due to potential market saturation.
“The long-term growth horizon for Eli Lilly is obviously intact, but given the saturation of its dominant growth market … this is why I still rate Eli Lilly a genuinely worthy Hold, and my decision to trim by 50% reflects my elite-alpha strategy considerations.”
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Microsoft Corporation (MSFT): Downgrade by Envision Research. Despite strong fundamentals, Microsoft’s stock is expected to experience further corrections, advising caution until a more attractive valuation is reached.
“The current correction is still relatively minor by historical standards … I see large odds for the ongoing price correction to continue and for its share price to touch the ~$450 level in the near future. If this occurs, it could offer a compelling entry point for both near-term traders and also fundamental-oriented investors.”