Thursday's analyst calls: Microsoft to continue rising, regional bank to climb more than 20%

Published Thu, Mar 21 20245:49 AM EDTUpdated Thu, Mar 21 20248:32 AM EDT

(This is CNBC Pro's live coverage of Thursday's analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A tech giant and a regional bank were in focus among Thursday's biggest analyst calls. KeyBanc initiated coverage of Microsoft with an overweight rating, noting the company is primed to benefit from companies monetizing artificial intelligence. Goldman Sachs started coverage of First Citizens Bancshares with a buy rating, saying the regional bank can continue rising from here. Check out the latest calls and chatter below. All times ET. 8:32 a.m.: Argus upgrades Micron after big second quarter Micron's strong second quarter is another sign that the rally in chip stocks still has room to run, according to Argus. Analyst Jim Kelleher upgraded Micron to buy on the heels of Micron's quarterly report, saying that pricing for certain chips appears to be getting stronger. "The long negative trend in NAND and DRAM prices appears to be over, reflecting the lagged effects of prior production cuts, right-sizing of distributor and OEM inventories, and the AI-driven demand surge in data center," the note said. Micron earned an adjusted 42 cents per share on $5.82 billion of revenue. Analysts surveyed by LSEG were expecting an adjusted loss of 25 cents per share on $5.35 billion of revenue. The company's guidance also impressed Kelleher. "Fiscal 3Q24 guidance reflects improving demand in consumer markets and demand recovery in enterprise markets. Surging AI interest is driving demand for HBM (high bandwidth memory) in the data center market," the note said. — Jesse Pound 8:20 a.m.: Evercore ISI names Apollo, KKR 'top picks' in private credit market Apollo Global Management and KKR could be major beneficiaries of the booming growth in the private credit market, according to Evercore ISI. Analyst Glenn Schorr maintained his outperform rating on both of the financial stocks. His $120 price target on Apollo and $105 price target on KKR suggests 6.5% potential upside for each stock. Shares of Apollo are up nearly 21% this year, while KKR has added 19%. "We continue to see double-digit growth in the private markets for years to come, despite private equity and opportunistic real estate being more mature and cyclically slower right now…we think the next legs will be led by multiple areas across private credit like asset-backed finance, insurance, and large private investment grade lending," Schorr wrote in a Thursday note. "KKR & APO are our top picks any time." The $1.7 trillion private credit market could more than double over the next five years, Schorr added. — Pia Singh 7:50 a.m.: Bank of America slashes Boeing price target, says 'course correction' is needed Bank of America said Boeing's current "course correction" is a "longer but necessary route." The firm stood by a neutral rating on the troubled aerospace stock, and cut its price target to $210 per share from $225. "Despite being in a strong civil aviation market, we think Boeing's shares are likely range bound for the time being ahead of possible reputational and operational short- to medium-term risks," analyst Ronald Epstein said. "We think that financial targets will necessarily need to take a seat further back to compliance, safety, and quality assurance." Boeing is second-worst performer in the S & P 500, losing 28% this year amid a myriad of safety issues and concerns. BA YTD mountain BA year to date — Brian Evans 7 a.m.: Here's what analysts are saying after Micron Technology's second-quarter earnings Micron Technology's fiscal second-quarter earnings beat has analysts on Wall Street optimistic that the computer memory company can further capitalize on still expanding artificial intelligence opportunities. Micron also issued better-than-expected forward guidance for the third quarter, saying that it sees revenue of $6.6 billion. Analysts polled by LSEG forecast $6.02 billion, respectively. Micron provides both memory and flash storage for computers and data centers, with the latter being an essential part of the robust power needed to optimize AI software. "[W]e expect a) growing margin-accretive HBM revenue, b) improving industry supply/demand dynamics, and ultimately c) positive EPS revisions, to drive stock price outperformance," Goldman Sachs analyst Toshiya Hari wrote on Thursday, The analyst reiterated a buy rating on Micron stock and increased his price target to $122 per share from $112, or about 27% upside from Wednesday's $96.25 close. "This was a good quarter from Micron, better than expected as better pricing fell through to EPS for the first time in a couple of quarters," Morgan Stanley's Joseph Moore said on Thursday. "We still see a weaker 2h but recognize the stock is going higher near term." The analyst stood by an underweight rating on Micron stock, but increased his price target to $98 per share from $78. "We expect Micron to ship $700.0 million in HBM memory in C24 and believe Micron's multiple should expand given its AI exposure and its peers expansion," Citi analyst Christopher Danely said, adding that Micron remains the firm's top pick. The analyst reiterated a buy rating and a $150 per share price target, equating to nearly 56% upside ahead. — Brian Evans 6:17 a.m.: TD Cowen ups Nvidia price target TD Cowen reiterated an outperform rating on Nvidia and increased its price target to $1,100 from $900, which calls for upside of nearly 22%. Analyst Matthew Ramsay noted the firm came away from Nvidia's GTC Conference earlier this week "firmly confident in the company's leadership position in all forms of accelerated computing, especially AI, across compute, networking, and software." He added that the introduction of Nvidia's next generation Blackwell platform for artificial intelligence programs reinforces the company's "compute leadership across the stack." "While by and large the announced specs and performance gains were largely in-line with (admittedly sky-high) investor expectations, we view this breadth of product innovation as emblematic of NVIDIA's approach: the company develops a full system, optimizes it for accelerated computing and AI, then disaggregates that system to go to market," Ramsay said. Nvidia has continued its meteoric rise from a year earlier, gaining more than 82% in 2024. NVDA YTD mountain NVDA in 2024 — Brian Evans 5:58 a.m.: TD Cowen upgrades Broadcom on yet to be realized AI play Broadcom could have more room to run and take further advantage of an AI opportunity, according to TD Cowen. The firm upgraded the chipmaker to outperform from market perform on Thursday and increased its price target to $1,500 from $1,400. TD's forecast implies 17% upside from Wednesday's close. Broadcom stock has climbed 14.3% in 2024. "Our rating has admittedly been on the wrong side of this remarkable franchise for some time now, as the stock has outperformed the broader SOXX index by ~50% over the last two years, but despite this recent run we are confident in sustainability and diversity of growth and potential upside to consensus' forward estimates driven by AI compute/networking and software growth/margins," analyst Matthew Ramsay said. The analyst also listed three near-term catalysts that underpin Broadcom's potential growth: Adding a third customer to its custom chip business; better-than-expected growth after the closing of the company's acquisition of VMWare expectations for the semiconductor space to only post modest gains in 2024 and 2025 — Brian Evans 5:49 a.m.: KeyBanc initiates Microsoft as overweight Microsoft is poised to capture two of the main ways companies in the current technology ecosystem can monetize the artificial intelligence craze, according to KeyBanc. The firm initiated coverage of tech giant with an overweight rating alongside a $490 price target, which implies more than 15% upside from Wednesday's close. Microsoft stock has climbed 13% in 2024, respectively. MSFT YTD mountain MSFT year to date "Between Azure and the suite of copilots being rolled out across Office and elsewhere in the product portfolio, Microsoft sits in the catbird seat in two of the three main ways software vendors can monetize the AI wave," analyst Jackson Ader wrote in a note. Ader thinks Microsoft can benefit from what he refers to as "direct" and "meter" AI monetization, meaning charging people direct fees for AI for the former and through volume or usage tied to storage needs for the latter. "Playing right into its strength—the massive installed base—Microsoft has been out-front on AI capabilities and on AI monetization," he added. "Folding Office and Github Copilots into the products for a tangible monthly revenue driver gives investors tangible ROI on all the investments being made on the technology." — Brian Evans 5:49 a.m.: Goldman says buy First Citizens Bancshares About a year since the regional banking crisis, Goldman Sachs thinks it's time to buy one name in the space. Analyst Ryan Nash initiated coverage of North Carolina-based First Citizens Bancshares with a buy rating and a price target of $1,950. That forecast implies upside of 23% over the next 12 months. The bank, which is up more than 11% this year, acquired a large chunk of failed Silicon Valley Bank for $16.5 billion in 2023 . "We see FCNCA well positioned to deliver low-to-mid teens returns [return on tangible equity] over time, driven by above peer loan growth which will help drive better [net interest income] growth (particularly in a higher for longer rate scenario) and controlled costs," Nash wrote. "Additionally, given its peer leading capital levels, it should be well positioned to return > 20% of its market cap to shareholders (via a buyback) in the coming quarters," Nash added. — Fred Imbert