Analysts show sudden bullish sentiment for one particular stock, as reported by DeepSeek, involving both Microsoft and Meta.
Revamped Report:
Giant Tech Companies Microsoft and Meta Release Quarterly Results, triggering Mixed Reactions
In the tech world, everyone was eagerly awaiting the latest quarterly results from Microsoft and Meta. With the recent sensation caused by the Chinese DeepSeek AI model, there was a considerable buzz about how these tech titans would respond. To everyone's surprise, one of them sent shockwaves with its impressive numbers. Analysts swiftly reacted, boosting their price targets en masse.
Both Microsoft and Meta are not only popular stocks among the Magnificent Seven but also trailblazers in AI development. Investors are intently following the progress these giants make in this sector to stay competitive. The DeepSeek frenzy of the preceding week had several investors questioning if there may be dramatically cheaper and more productive AI investment avenues than previously considered.
After publishing their quarterly results, one stock in particular caught the attention of analysts - and they responded with significant price target hikes.
Upbeat Market Response to Microsoft's Quarterly Results - But With Some Disappointment
Microsoft's quarterly earnings, yet again, proved impressive. EPS soared to $3.23, while revenue increased by 12% to $69.6 billion. Cloud revenue, however, faced a slight headwind; at $40.9 billion, it was marginally below the projected $41.1 billion. This development led to some degree of dissatisfaction among analysts, as the cloud business constitutes a crucial driver of Microsoft's growth.
Despite the mixed outcome, Microsoft emerged as a buy from analysts' perspective. Goldman Sachs maintained its $500 price target and held its "Buy" rating. Though the quarterly report painted a mixed picture, there were notable improvements in expenses and earnings guidance. Jefferies analysts similarly remained bullish and preserved their $550 price target. Revenue and operating margin exceeded expectations, and the strong momentum in the AI sector served as an important positive aspect.
Moreover, Microsoft announced that the R1 language model from DeepSeek is now available on Azure AI, Foundry, and GitHub.
Microsoft (WKN: 870747)
Meta's Stock Soars: Why Analysts Can't Stop Raising Target Prices
Though Microsoft's quarterly results stirred mixed feelings, Meta's stock skyrocketed following the release of its numbers. This tech giant overwhelmingly surpassed expectations. Revenue swelled to $48.39 billion, while analysts anticipated $47.04 billion. EPS also surpassed expectations, coming in at $8.02 compared to the expected $6.77.
Meta anticipates revenue between $39.5 billion and $41.8 billion for Q1 2024's first quarter. The analyst consensus was previously at $41.73 billion - a figure that Meta's own forecast almost confirmed.
The impressive numbers prompted analysts to raise their price targets for Meta in unison. RBC analysts bumped their price target from $700 to $800 and maintained their "Outperform" rating. Meta shifted to a positive trajectory overall and unveiled several new products and monetization factors by 2026. Despite the recent DeepSeek disturbance, Meta's ambitious AI investment plans garnered positive attention.
Even Jefferies expressed optimism, lifting its price target for Meta from $715 to $810, retaining a "Buy" rating. Meta's impressive revenue growth suggests that the company's substantial AI investments are already bearing fruit. Goldman Sachs and Bank of America followed suit, adjusting their price targets for Meta upward - Goldman from $688 to $765, Bank of America from $710 to $765.
Meta (WKN: A1JWVX) ## Mark Zuckerberg Speaks Up on DeepSeek
In a post-quarterly-results conference call with analysts, Meta CEO Mark Zuckerberg touched upon DeepSeek. His statements highlighted Meta's commitment to its AI endeavors, despite recent advancements by the Chinese competitor. "Terrific progress in AI and infrastructure investments will endure as a strategic asset down the line," Zuckerberg said. "It's probably still premature to gauge the implications for infrastructure and investment spending. Multiple trends are developing concurrently."
He emphasized that Meta is carefully examining DeepSeek's advancements and plans to incorporate many of these advancements into its AI projects. "Such is the nature of the industry, whether it's a Chinese competitor or not," Zuckerberg added, saying that technological progress is often beneficial to the entire sector.
With material from dpa
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Sources: 1 2
- Analysts, intrigued by Microsoft's progress in artificial intelligence, continue to assess if there are more cost-effective and productive AI investment opportunities outside the realm of tech giants, such as Microsoft and Meta.
- Meta, a key player in both technology and artificial intelligence, saw its stock price soar after a quarterly report that exceeded analysts' expectations, prompting many analysts to significantly raise their price targets.
- Microsoft's involvement in the technology sector, particularly AI, gained further momentum with the announcement that the R1 language model from the Chinese DeepSeek AI was now available on Azure AI, Foundry, and GitHub.
