Brian Niccol, CHIEF EXECUTIVE OFFICER of Starbucks
Anjali Sundaram|
My leading 10 points to view Wednesday,Sept 18
1. Wall Street gets on track for a controlled open Wednesday, with all eyes on the Federal Reserve’s choice due at 2 p.m. ET. It’s still up in the air whether the Fed will certainly reduce by 25 basis factors or select a bigger 50-point decrease. Whatever the Fed does, do not attack initially as it will certainly be ahead of time.
2. Will Starbucks adopt a so-called China Lite strategy under new CEO Brian Niccol? Bank of America says it should, at least. Analysts upped their price target on the Club holding to $118 a share from $112. Licensing stores in China instead of the company owning them would boost returns and the stock’s multiple, analysts said.
3. Salesforce CEO Marc Benioff called out all other purveyors of artificial intelligence in my one-on-one interview at Dreamforce in San Francisco. He took a direct shot at Microsoft, noting the billions of dollars wasted on its AI tool Copilot. You want to use AI as an agent that can understand decisions based on your data, he said.
4. Microsoft, meanwhile, is joining BlackRock and other companies to raise $100 billion to develop data centers for AI and the energy infrastructure to power them. The Global Artificial Intelligence Infrastructure Investment Partnership, or GAIIP, is initially looking to raise $30 billion for new and existing data centers.
5. Bernstein said Apple‘s launch of the iPhone 16 base and Pro this year should be “relatively strong/normal” but could be skewed by the delayed rollout of Apple Intelligence, the system that will use generative AI. Analyst Toni Sacconaghi kept his outperform rating and a price target of $240.
6. William Blair started coverage of Broadcom with a buy. The chipmaker is forecasting $12. billion in AI sales in its fiscal year 2024 and the analysts see a bottoming in non-AI semi chips and accelerating growth of Ethernet AI network fabrics. Blair also initiated Nvidia with a buy, noting tremendous demand for its products, and Arm with a buy, calling it a “critical vendor” of computing IP with best-in-class financials.
7. Wells Fargo cut its price target on Micron to $175 from $190, but said the sell-off in the chip stock is overdone. The analysts kept an overweight rating on shares, noting the company is still early in its high-bandwidth-memory inflection.
8. Needham likes Super Micro Computer and started coverage with a buy and a $600 price target. I am still waiting for some clarity when it comes to the company’s accounting.
9. GE Healthcare upgraded to a buy from neutral at BTIG, with a $100 price target. The Club name is no longer counting on China for growth.
10. Goldman started coverage of the much-loved Marriott with a buy. This is always the go-to name on an interest rate cut. The analysts also upgraded InterContinental to a buy from neutral.
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