Data indicates that production of server computers for artificial intelligence applications remains strong, prompting a Wall Street firm to raise its price targets on several AI stocks.
Taiwan-based contract manufacturers Foxconn, Wistron and Wiwynn have reported robust sales of AI servers in the May-through-July time period, Mizuho Securities analyst Vijay Rakesh said in a client note Wednesday.
Data center buildouts by Big Tech players like Microsoft (MSFT) and Oracle (ORCL), as well as neoclouds CoreWeave (CRWV) and xAI, augur well for AI chip and server makers, he said.
Further, the opening of the China AI market to U.S. chipmakers AMD (AMD) and Nvidia (NVDA) is another positive development, Rakesh said.
Rakesh raised his price targets on four AI stocks, all of which he rates as outperform. He hiked his price target on AMD to 205 from 183, Credo Technology (CRDO) to 135 from 112, Dell Technologies (DELL) to 160 from 150, and Nvidia to 205 from 192. He also reiterated his buy rating and price target of 155 on Micron Technology (MU).
But AI stocks were a mixed bag on the stock market today. AMD and Credo fell while Dell, Micron and Nvidia were largely flat.
Elsewhere on Wall Street, Piper Sandler analyst Harsh Kumar maintained his overweight rating on Nvidia stock and raised his price target to 225 from 180.
"We continue to think that Nvidia is in a demand-greater-than-supply situation and will likely continue to be through the end of the year," Kumar said in a client note Wednesday. "Even without China, the U.S. HPC (high-performance computing) demand is outstripping Nvidia's ability to supply its latest architecture."
Several AI stocks are on the IBD Tech Leaders list. They include AMD, Credo, Micron and Nvidia.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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