(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Two megacap stocks were in focus Wednesday after some major calls made by analysts. On a positive note, Bank of America raised its price target on Nvidia to $1,100, implying gains of nearly 20%. On the other hand, Wells Fargo downgraded Tesla to underweight from equal weight. Check out the latest calls and chatter below. All times ET. 5:44 a.m.: Southwest has more downside on the horizon, Jefferies warns Southwest shares look like a better deal following Tuesday’s sell-off, but the airline could see more downside ahead, according to Jefferies. Analyst Sheila Kahyaoglu upgraded the airline stock to hold from underperform and raised her price target by $8 to $28. Still, her new price target implies shares will slid another 2.6% — even after Tuesday’s big drop. Shares dived nearly 15% in Tuesday’s session for its worst day since 2020 after the company reported delays from Boeing, its sole plane provider. As a result, Southwest said it was rethinking all 2024 full-year guidance. Tuesday’s move down “finds a floor,” Kahyaoglu said. That’s because the four or more points of revenues per available seat mile was “always overly ambitious forecasting vs demand.” While fewer planes will hurt available seat miles, it should help cost per each of those miles outside of summer as hiring presents an offset. Free cash flow should also improve, the analyst added. Following Tuesday’s slide, Southwest shares are trading modestly below flat on the year. — Alex Harring 5:36 a.m.: BofA says Nvidia shares can climb to $1,100 Bank of America is increasingly bullish on Nvidia ahead of a technology conference deemed the Woodstock of artificial intelligence. Analyst Vivek Arya raised his price target for the chipmaker to $1,110 from $925, with the new target implying a 19.7% upside over Tuesday’s close. Arya also reiterated his buy rating. “Our $1100 PO is based on 37x CY25E PE ex cash, within NVDA’s historical 26x-69x forward year PE range, justified given stronger growth opportunities ahead as gaming cycle troughs and data center demand potentially faces strong, long-term demand dynamics,” Arya wrote to clients. Arya’s call comes ahead of the closely watched GPU Tech Conference, or the “Woodstock” of AI, during which Arya expects Nvidia to showcase: The growing importance of generative AI, as well as omniverse and digital twins, across end markets. The potential to improve a global computing infrastructure valued ay between $1 trillion and $2 trillion with accelerators, growing the market over the next three to five years. Updates to the pipeline of products including accelerators, ethernet switches, data processing units and edge AI. Work on monetization within software and services businesses. New use-cases within business and sovereign countries. The analyst also said the stock’s valuation and ownership levels show the potential for upside. Notably, he said Nvidia stock is at a lower forward price-to-earnings multiple today than when ChatGPT was launched. Despite recent cooling, Nvidia has soared in recent months amid the AI craze. Shares are up more than 85% in 2024, extending gains of more than 230% recorded last year. — Alex Harring 5:36 a.m.: Wells Fargo downgrades Tesla Wells Fargo is throwing in the towel on Tesla for now. Analyst Colin Langan downgraded the electric vehicle maker to underweight from equal weight. He also cut his price target to $125 from $200. The new forecast implies downside of 29.5% from Tuesday’s close. Shares fell more than 1% in the premarket following the downgrade. “We see downside risk to volume as price cuts are having a diminishing impact. We see headwinds from disappointing deliveries & more price cuts, which likely drive negative EPS revisions,” Langan wrote. “TSLA’s growth in core markets has moderated with EU & China flattish in the LTM & the US down since Q2. More concerning, the effect of price cuts are moderating with 2H volume up only 3% [half over half] despite pricing that’s down 5% h/h,” he added. “We expect volumes to be flat in 2024 & down in 2025. In the wake of [price] cuts are lower lease residuals, disgruntled customers & the possible loss of the luxury brand premium.” Tesla shares have languished in 2024, losing more than 28% as demand for electric vehicles wanes. Last year, the stock surged more than 100%. TSLA 1Y mountain TSLA one-year chart — Fred Imbert
