A number of top technology stocks rose in the second quarter and are poised for a rally, Wall Street analysts say.Several investment firms said this week that the artificial intelligence boom will continue. He said many of these companies have more room to run. CNBC Pro scoured Wall Street research to find the tech stocks to buy as the second quarter begins. These include Microsoft, Amazon, Pinterest, Alphabet, and Nvidia. “With its partnership with OpenAI, we believe MSFT is positioning itself as a significant beneficiary of Gen AI,” Jefferies analyst Brent Till said earlier this week. The company raised its price target for Microsoft from $465 per share to a street-high price target of $550 per share. Till said tech giants are well-positioned to gain market share as they move deeper into AI. “Furthermore, we believe that AI products will increase profits over time due to their strong pricing power,” he wrote. Additionally, the company's cloud computing division, Azure, has plenty of room to grow, he added. The analyst noted that Azure should also benefit from OpenAI. With the stock up 13% this year, Till said now is the time to start adding to the stock. He said, “While real returns are not expected until late 2024 or 2025, investors should start positioning now because cicadas are outperforming software.'' Alphabet Bank of America says Alphabet lags behind many of its big tech peers, but the search giant is worth buying. The company named the stock a top idea for the second quarter. “Alphabet stock underperformed the broader market and its peers in the first quarter of 2024,” analyst Justin Post wrote. Still, the company said there is no shortage of positive opportunities going forward. Analysts said this includes upside growth in AI and search, as well as future moves toward further cost reductions. “We may also see some commentary in the second quarter (earnings releases or industry events) that the integration of AI into search is contributing to usage and monetization,” he said. Alphabet is scheduled to release its financial results at the end of this month. Although the stock is up 9.2% since the beginning of the year, Post said the stock's valuation is “reasonable relative to history” and investors should buy into the company's stock quickly. Pinterest “T size” [trillion] Evercore ISI said the social media company “offers an advertising market opportunity with strong long-term tailwinds.” Analyst Mark Mahaney said the market share opportunity for Pinterest is huge and the company hasn't even scratched the surface. “Pinterest offers advertisers a differentiated channel to reach users with an unusual combination of scale and high purchase intent,” he wrote. The company also said Pinterest has many other sources of revenue, including its partnership with Amazon. Last year, the social media service announced a partnership with Amazon. For third party advertising. ”[The] The partnership with Amazon could potentially bring significant increases in advertiser demand to the Pinterest platform,” Mahaney added. [is] This is another positive for Pinterest stock. Stock prices will fall more than 7% in 2024. Amazon – Wells Fargo Overweight Rating “We reiterate our Overweight Rating and Signature Pick and add AMZN” Tactical Ideas List for Q2 2024. Increases PT from $211 to $217 based on 30x updated 2026E EPS. … Amazon (OW) is on the upswing in North American retail OI. [operating income] Margin and AWS revenue growth unlocks company's profitability. ” Alphabet – Bank of America Buy Rating “Alphabet's stock underperformed the broader market and its peers in Q1 2024. …Also, the integration of AI into search will increase usage and monetization. Possible comments in Q2 that it is contributing… GOOGL trades at an average of $1,000, 22x GAAP P/E over the past 10 years, double-digit revenue growth, cloud margins We believe our multiple is reasonable relative to historical performance, given the expected expansion of AI assets and opportunities to leverage AI assets. “Microsoft – Jefferies buy valuation” late 2024-25 Investors should start positioning now, as significant growth is unlikely over the coming months and semis are outperforming software. …With his partnership with OpenAI, MSFT sees itself positioning itself as a major beneficiary of Gen AI. …Furthermore, we believe that AI products will increase profits over time due to their strong pricing power…” Pinterest – Evercore ISI, outperforming rating 'A 'T-Sized'' [trillion] Advertising market opportunity with strong long-term tailwinds. … PINS provides advertisers with a differentiated channel to reach users with a rare combination of scale and high purchase intent. … [The] The partnership with AMZN has the potential to bring significantly increased advertiser demand to the PINS platform…despite the withdrawal of branded advertising in early October, digital ad spending is at least stable and likely improving This is proof that you are doing it. ” Nvidia – Mizuho, Buy Rating “We rate NVDA at 1 Buy valuation and 1,000 PT, approximately 31x F26E EPS, within the historical range of 15-67x. Seems appropriate given that NVDA continues to dominate the AI landscape with comprehensive hardware and software offerings and increasing AI server content from GPUs, DPUs, and sales decline in China. Despite investors' short-term concerns about losing momentum in the AI trade, CPUs in particular performed well.
