Big Moves | Tesla's target price lowered! NVIDIA, CLOUD MUSIC, XIAOMI-W become Wall Street's beloved AI stocks.

Citigroup: Maintains "Neutral" rating on Tesla, lowers target price by 9% to $175 from $192

If calculated at the latest closing price of $180.59, this price means a 3% downside.

The bank said that Tesla's first-quarter profit margin was lower than expected, confirming that the price cut did not achieve the expected effect. Along with the recent price cut in the second quarter, it may suppress short-term sentiment, as the profit margin may be weaker as the group strives to achieve its sales target for 2023 in a weak macroeconomic environment. The bank expects the group's stock price to fall.

The bank estimates that the continued pressure on automotive gross margins in the second quarter will see a moderate recovery in the second half of the year as sales increase and cost pressures decrease. If the group needs to further reduce prices to achieve its sales target for 2023, the bank's estimate of Tesla may face additional risks.

Citigroup: Maintains "Buy" rating on Microsoft, raises target price by 18% to $332 from $282

If calculated at the latest closing price of $288.45, this price means a 15% upside!

The bank said that the company's performance has been relatively calm under the catalyst of generating AI monetization, due to negative impacts from macroeconomic and IT spending resistance.

The bank pointed out that the growth trend of the business this quarter is better than that of the previous quarter, and the resistance faced by the company continues to improve. It is becoming more cautious about its cloud computing service Azure, and its growth forecast for Azure in fiscal year 2024 is 5 percentage points lower than the market's expectations. Even with the lower forecast, the accelerated growth in profits, moderate growth in spending, and improved revenue growth are improving.

Bank of America: Reiterates "Buy" rating on Nvidia, raises target price to $340

If calculated at the latest closing price of $279.31, this price means a 22% upside!

The bank said that the surge in demand for artificial intelligence (AI) in cloud and enterprise data centers has prompted the market to shift from traditional server CPUs to AI accelerator chips with higher computing power/value. The expected trend will accelerate this year, driving accelerator sales to exceed $40 billion by 2025.

The bank expects the trend to be favorable for Nvidia and custom chip manufacturers such as Broadcom and Marvell, and relatively unfavorable for Intel. Considering the strong pricing power of Nvidia's new H100, the bank raised Nvidia's 2027 long-term earnings per share forecast from $14 to $17. In an optimistic scenario, if the company can maintain its current market share of about 75% in the AI market, the earnings per share estimate can reach more than $20.

Bank of America: Reiterates "Buy" rating on New Oriental, raises target price by 15% to HKD 42.7 from HKD 37.1

If calculated at the latest closing price of HKD 35.15, this price means there is still 21% upside potential!

The bank expressed its continued optimism for New Oriental among many education groups, as it has multiple business growth engines and its prospects are better than expected, bringing potential profit growth; attractive risk-return; and future shareholder return strategies.

The momentum of the group's core business may remain strong due to post-epidemic demand recovery and market share growth, and the number of enrollees may increase significantly, leading to strong expectations of revenue growth of 53% to 57% in US dollars.

JPMorgan: Maintains "Overweight" rating on NetEase, raises target price by 10% to HKD 170

If calculated at the latest closing price of HKD 144, this price means there is still 18% upside potential!

The bank expects the group to have expected revenue and better profits in the first quarter of this year, with revenue expected to increase by 5% year-on-year to RMB 24.7 billion; adjusted net profit increased by 19% to RMB 6.1 billion, 8% higher than market expectations. The strong performance of Eggroll Party should be enough to offset the revenue impact of the suspension of traditional game and Activision Blizzard partnerships.

The report pointed out that the group's stock price performance this year has outperformed its peers in the Internet industry, mainly due to better competition and growth brought by more game supply. Investors' preference for online games exceeds other sub-industries of the Internet and has better regulatory prospects.

Investors are optimistic about the gaming industry, believing that it is a beneficiary of generative AI; the performance of Eggroll Party is more resilient than expected. The bank expects the group's strong stock price performance to continue, with year-on-year growth in online games in the first to fourth quarters of this year expected to be 2%, 10%, 12%, and 15%, respectively.

Morgan Stanley: Gives Xiaomi an "Overweight" rating with a target price of HKD 15

If calculated at the latest closing price of HKD 11.96, this price means there is still 25% upside potential!

The bank expects that ChatGPT is unlikely to have a positive impact on smartphone shipments or Internet revenue growth this year, but if the positive effect is shown in advance, compared with the peer Transsion, Xiaomi is expected to capture greater monetization opportunities, because Xiaomi has a global monthly active user base of 582 million people, and its Internet business ARPU is also 12 times higher than Transsion, and has taken the lead in exploring AI and voice recognition applications in the speaker market, with more development potential.