Tech Giants and Analyst Picks: A Week in Review

Notable analyst calls this week: Meta, AMD and Intel among top picks

The S&P500 (SP500) closed in the red on Friday, after a heavy week full of earnings from Wall Street firms, including tech behemoths such as Apple (AAPL), Meta Platforms (META) and Amazon.com (AMZN). Wall Street had a slew of upgrades, downgrades and changes in price target from analysts. Here are some of the major calls for the week: Intel's weak guidance worries Wall Street analysts Raymond James downgraded Intel (INTC) to Market Perform from Outperform and said it expected the third quarter outlook to be weak but were surprised by the magnitude, especially on margins. J.P. Morgan, which kept its Underweight rating and cut PT to $26 from $35, said operational execution will be even more important as Intel targets to become a global leader in the semiconductor foundry market. BofA materially reduced its Intel's forecasts after a weak second quarter, while New Street Research downgraded it to Neutral with a $27 price target. Wall Street bullish on Meta after strong results and outlook Meta Platforms (META) received PT hikes after the Facebook-parent issued strong result and forecast on Wednesday, leading to the stock rise over 4% in extended trading. Citi is "incrementally positive" on shares of Meta, given engagement & monetization gains and expanding margins, while Morgan Stanley saw progress on longer-term engagement initiatives including WhatsApp, Meta AI, and Threads and observed healthy trends, particularly from young adults on Facebook. "META continues to execute at arguably the best pace of any company in digital advertising, with little revenue deceleration despite facing very tough comps in 2H24," noted Barclays. J.P. Morgan also thinks Meta is showing signs of progress across key areas of its broader AI strategy. Analysts keeps CrowdStrike in focus after global outage CrowdStrike was in the spotlight again after reports of Delta hiring law firm to sue the company and Microsoft over the recent global IT outage, leading to Jefferies slash PT for the cybersecurity company to $300 from $400. "While our checks have indicated little churn (some new business impact expected), we're reducing our ARR est. by 1% in FY25 & FY26," said analyst Joseph Gallo. Needham analyst Alex Henderson and his team have cut their revenue, ARR, and EPS Estimates for CrowdStrike but thinks the damage to CrowdStrike's reputation will fade over the next year. Argus positive on PayPal's turnaround plan after Q2 results Argus upgraded PayPal Holdings (PYPL) to Buy from Hold following the payment tech company's strong Q2 earnings, with Argus analyst Stephen Biggar noting that efforts to re-ignite growth are proceeding faster than originally expected. "We view the company as making steady progress on its turnaround plan, which includes a new CEO and CFO, improved on-line checkout experiences, and revived growth from Venmo," Biggar wrote. AMD surges after financial report; analysts not convinced on long-term prospect Advanced Micro Devices (AMD) posted a better-than-expected Q2 report, leading to the stock surge over 7% during early trading on Wednesday. However, analysts were not convinced. Oppenheimer said it remains cautious toward AMD's ability to deliver a profitable long-term business model as the second horse in the secularly declining PC market, while Truist, which maintained its Hold rating and lowered PT to $156 from $162, said its long-term concern on AMD remains. "We see AMD's position in AI as likely confined versus Nvidia's solutions, and we expect the X86 market will slowly come under pressure from new CPU competitors," said Truist analyst William Stein. KeyBanc said it is concerned that any moderate down tick to expectations could add substantial risk to the stock based on valuation levels well above peers. Bank of Montreal (BMO) was downgraded by Royal Bank of Canada to Sector Perform from Outperform. The firm also lowered EPS estimates after digging into BMO's credit results.

Tech giants with poor Q2 results dominate top trending stocks this week (NASDAQ:AMZN)

The broader market continued its retreat this week, as the S&P 500 (SP500) fell 2.5% for the week, with losses in three out of five sessions. This marks the first three-week losing streak for the benchmark index since April. Big tech names continued to trend this week, but mostly not for positive reasons. The tech-focused Nasdaq Composite (COMP:IND) had a bigger decline of 4.3% as many companies released their Q2 reports that disappointed investors. Intel (NASDAQ:INTC) plummeted nearly 32% in the week after the chipmaker reported weaker-than-expected Q2 earnings, suspended its dividend starting Q4, slashed capital expenditures and said it would lay off over 15% of its workforce under a $10B cost reduction plan. The company also released a disappointing Q3 outlook with both top and bottom lines significantly lower than the consensus. Microsoft (NASDAQ:MSFT) kicked off a week of Big Tech earnings reports from the Magnificent 7, but ended the five-day trading period down 5.4%. The tech giant reported fiscal Q4 results that topped expectations, but Azure growth was weaker-than-expected. Its Q1 revenue projections also fell short of consensus estimates, but Microsoft (MSFT) expects Azure growth to accelerate in the second half. Advanced Micro Devices (NASDAQ:AMD) fell 6.2% this week, erasing gains seen after a better-than-expected Q2 show and Q3 outlook. Following the results, many analysts expressed caution over whether the chipmaker's stock can return to growth after spending most of July in the red. Concerns over the state of the PC CPU channel and AMD's ability to compete with Nvidia (NASDAQ:NVDA) and Intel (INTC) in AI also loom high. Nvidia (NVDA) was down nearly 6% in the week after it became the target of a U.S. Department of Justice probe into anti-competitive practices. The DoJ was reacting to complaints from rivals that Nvidia (NVDA) allegedly abused its market dominance in selling chips that power AI products. It has reached out to multiple competitors, including AMD and AI chip startups.