Analysts at Morgan Stanley have handpicked several artificial intelligence (AI)-related stocks worldwide, expected to prosper from the rising AI trend, reported CNBC.
The analysts, led by Shawn Kim, noted that the 2024 earnings forecasts for AI stocks have increased from their July 1 estimates. They revealed that AI stocks are “materially cheaper today than they were last month.”
While Nvidia Corporation NVDA reported earnings that exceeded expectations Wednesday, Morgan Stanley highlighted the need to look at the “potential AI opportunities.”
“Unconstrained demand is probably well above what investors are modeling as NVDA is only serving less than half of the demand out there today. So fundamentals for companies are even better and still on an uptrend,” the analysts wrote.
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Under its “Greater China Semiconductors” coverage, Morgan Stanley’s top pick is Taiwan Semiconductor Manufacturing Company TSM. The bank expects TSMC to make 6% of its 2023 revenue from AI-related semiconductors. It also favors Global Unichip Corp in AI tech hardware, server company Wistron, PC-maker Asustek and tablet company Quanta Computer.
South Korean chipmaker SK Hynix and Samsung were also named as top picks. In Japan, Disco Corporation earned a nod for its “meaningful demand increase from generative AI-related Equipment.”
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