myGrilloCOM | The Street weighed in on 5 tech stocks ahead of earnings

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Wall Street analysts this week weighed in on five our of mega-cap tech stocks ahead of their quarterly earnings reports in the coming weeks. We agreed with some of the notes, disagreed with others. Here’s a quick rundown of the analyses, plus where we currently stand on the stocks: 1. Nvidia NVDA YTD mountain NVDA stock performance YTD. Street take: Analysts at Citi and Morgan Stanley lowered their price targets on Nvidia (NVDA) stock after news broke Tuesday that the United States will restrict the sale of advanced artificial intelligence chips to China in the coming weeks. Citi dropped its price target to $575 from $630, arguing the new rules could make it difficult for the chipmaker in China. Morgan Stanley agreed the restrictions could be a “negative for revenue” and cut its price target to $600 from $630. Both firms maintained buy ratings. Club take: Nvidia said the new rules won’t have an immediate impact on financial results because demand for their chips is so strong — and we tend to agree with management. The impact in the coming years is uncertain and Nvidia will need access to the Chinese market to maintain its strong levels of growth, but we’ll wait to hear from the company when it reports earnings on Nov. 15. Still, Nvidia is one of our “own it, don’t trade” given its innovation and huge head start on AI. 2. Microsoft MSFT YTD mountain MSFT stock performance YTD. Street take: Piper Sandler named Microsoft (MSFT) its “highest conviction large cap stock” to own going into the end of 2023. Analysts cited the company’s “first-mover advantage in generative AI,” noting its 365 Copilot release set for Nov. 1 will be a major catalyst for the stock. The December quarter should show accelerating growth prospects. The firm has an overweight rating and a $400 price target. Club take: We agree that the release of Copilot will help commercialize the use of generative AI at an affordable price. Copilot’s general availability date for enterprise customers is Nov. 1, so we should know what the initial uptake is soon. The contribution of AI products to Microsoft’s revenues is why we took advantage of the stock’s pullback after a strong fiscal-fourth-quarter earnings report in July and picked up some shares on weakness. 3. Apple AAPL YTD mountain AAPL stock performance YTD. Street take: Morgan Stanley lowered its price target on shares of Apple (AAPL) to $210 from $215 this week, saying that iPhone shortages and foreign-exchange headwinds could result in weaker sales for December. Ahead of the company’s fourth-quarter results on Nov. 2, Morgan Stanley estimates an earnings-per-share of $1.39 and revenues of $89.9 billion, and expects management to reiterate consensus estimates. Analysts said they are “more guarded” going into the print. Club take: Apple turned lower this week after a note by Counterpoint Research said sales of the new iPhone 15 are down 4.5% compared in China over the first 17 days on the market. But as we said earlier this week , Apple’s vast supply chain makes it difficult to extrapolate larger trends from one data point. This is why we always prefer to wait for what the company has to say. The company has surely earned the benefit of the doubt. 4. Meta Platforms META YTD mountain META stock performance YTD. Street take: Bank of America said Meta Platforms (META) is “best positioned for revenue acceleration” as the outlook for digital advertising revenue growth remains solid. Analysts cited the social media giant’s improvement in Reels, Messaging monetization, AI and machine learning improvements and growing Advantage+ adoption as key factors that will boost the top line. In a separate note Wednesday, JPMorgan said Meta remains a “top pick” for the same reasons. Club take: The first leg of Meta’s rise from its 2022 lows was on expense control after CEO Mark Zuckerberg and Co. reduced headcount and pulled back spending to protect profits. More recently, Meta Platforms has maintained its string of outperformance due to accelerating revenue growth, which is a product of a rebounding ad market and the application of AI tools that enhance the returns for advertisers. We’re looking forward to hearing more about the company’s latest AI offerings at its upcoming fiscal third-quarter earnings on Oct. 25. 5. Alphabet GOOGL YTD mountain GOOGL stock performance YTD. Street take: JPMorgan said growth at Alphabet ‘s (GOOGL) advertising verticals should accelerate as the online ad market strengthened in the second quarter and continued in the third quarter. Ahead of the tech firm’s fiscal third-quarter earnings on Oct. 24, the analysts estimate 10% year-over-year revenue growth in Search and 9% revenue growth in YouTube ads. Foreign exchange remains a headwind through 2024, but the firm is keeping its overweight rating. Club take: Alphabet, like Meta, is riding the uptick in online ads as the industry recovers from an awful 2022. And like Meta, the key for Alphabet is to maintain control of its expenses while its revenues rebound. The Google parent is well positioned to deliver strong financial results in its upcoming earnings report as it continues to find ways to implement new generative AI capabilities into its products. —Jeff Marks contributed to this report. (Jim Cramer’s Charitable Trust is long NVDA, MSFT, AAPL, META, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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Wall Street analysts this week weighed in on five our of mega-cap tech stocks ahead of their quarterly earnings reports in the coming weeks. We agreed with some of the notes, disagreed with others.

Here’s a quick rundown of the analyses, plus where we currently stand on the stocks: