AI capabilities for handsets, PCs to be next driver for artificial intelligence: Mizuho
The next driving force for artificial intelligence will be at the edge as OEMs start to push AI on-device capabilities for both handsets and PCs, believes brokerage Mizuho Securities.
Mizuho raised PT for Qualcomm (NASDAQ:QCOM) to $240, saying that it believes QCOM is well positioned with continued headset strength, Edge AI ramping with Snapdragon 8 Gen 3 for handsets and Snapdragon Elite X for PCs, a growing auto business and strong cash generation with >$10B/yr of FCF.
“We also see positive tailwinds from QCOM’s launch of Snapdragon 8 Gen 3 earlier this year, as it provides AI on-device capabilities to handset customers,” wrote Mizuho analyst Vijay Rakesh and reiterated Buy rating for Qualcomm.
The brokerage also raised PT for Western Digital (NASDAQ:WDC) to $90 and that of Micron Technology (NASDAQ:MU) to $155, saying that both companies would see tailwinds from higher NAND content in AI devices with better pricing.
“We see WDC’s NAND spinoff positively, potentially unlocking value while benefiting from favorable pricing trends in the near-term stronger cloud/enterprise environment as well as improved NAND content tied to AI on device,” added Rakesh.
Shares of Qualcomm were up over 1% in morning trade on Friday, while WDC rose nearly 1%. Micron rose 0.4%.
Mizuho also said that it believes “on-device AI for smartphones could double DRAM content growth over the next few years”, with 1-in-3 smartphones sold in 2025 could have generative AI/LLM capable Neural Processing Units embedded in the SoC.
Seagate Technology Holdings (NASDAQ:STX) also got a PT hike from Mizuho to $110 from $100, on belief that the company could see better cloud/enterprise demand into F25E and beyond with additional tailwinds from higher storage needs tied to AI on-device.
STX shares were up 1% on Friday.
