(This is CNBC Pro’s live coverage of Tuesday’s analyst conference call and Wall Street chatter. Refresh every 20-30 minutes to see the latest posts.) Among the stocks analysts were talking about on Tuesday were chipmakers and a struggling cybersecurity stock. Morgan Stanley named Taiwan Semiconductor a top pick, while Piper Sandler raised CrowdStrike to overweight from neutral. Check out the latest conference call and chatter below. All times ET. 7:43 a.m.: Morgan Stanley removes Amazon from top pick after earnings disappointment Morgan Stanley is lowering its outlook for Amazon, citing margin pressure related to Amazon’s product mix and continued consumer weakness as weighing on profits. Analyst Brian Nowak maintained an overweight rating on Amazon in a Tuesday note but removed the e-commerce giant from its top pick and lowered his price target to $210. That suggests a potential upside of 30.4% from the stock’s most recent closing price. “We were wrong about the trend for improving retail margins,” Nowak said. Amazon’s product mix has shifted toward lower-margin products, lower average selling prices (ASPs) and slower-than-expected advertising growth have weighed on the company’s profits more than analysts had anticipated. Amazon reported lower-than-expected second-quarter earnings on Thursday and also gave a disappointing outlook for the current quarter. “Valuation is not tough right now,” the analyst continued. “But in our view, AMZN needs to demonstrate its ability to grow and be profitable, even as its product mix continues to shift toward lower-margin products.” The stock is up about 6% so far this year but is down 19.5% in the past month. — Pia Singh 7:13am: Bank of America upgrades Apollo Global Management to Buy, sees 24% return after sell-off According to Bank of America, Apollo Global Management looks even more attractive after the recent share price sell-off. Analyst Craig Seigenthaler raised his rating on the asset manager to Buy from Neutral and maintained his price target at $123. This implies 24% upside potential for the stock, which is up 6.4% this year. APO YTD APO YTD The company’s second-quarter earnings results, weak economic data and low interest rate outlook have caused hedge funds to risk avert, especially last week, leading the analyst to note. But he remains bullish on the stock after the extreme sell-off and says the stock has an attractive valuation relative to EPS growth algorithms. “In our view, APO is becoming much less crowded among hedge funds, driven in part by secular concerns about increasing competition in the U.S. annuity market, as well as increased focus on the quality of the captive insurance model (rising liability costs and falling interest rates),” he said in a note on Tuesday. Apollo’s investor day on Oct. 1 and the possibility of it following KKR and Blackstone into the S&P 500 could boost the stock, according to Seigenthaler. — Pia Singh 6:48 a.m.: Loop Capital Raises Meta Price Target on AI-Driven Growth Story Loop Capital believes Meta’s strong quarterly report makes it a “best-in-class” growth stock as its generative AI capabilities evolve. Analyst Rob Sanderson maintained his buy rating on the Facebook parent after the company reported better-than-expected second-quarter quarterly profit and revenue last week. He raised his price target by $25 to $575, implying shares could rise about 20.9% over the next 12 months. “While the second-quarter reporting season revealed signs of softness in more brand-oriented ad platforms, Meta continues to deliver superior growth despite its larger revenue scale,” Sanderson wrote in a note on Monday. “We are increasingly optimistic about the company’s expanding business opportunity as it deploys its genAI applications across its vast user base,” Sanderson said. He noted that Meta management has said the company’s investments in core AI, including content ranking and advertising, are already generating strong returns on investment. Meta shares have risen more than 34% this year. — Pia Singh 6:32 a.m.: Citi upgrades AI stock Lumen ahead of post-market earnings release. Communications company Lumen Technologies’ latest customer signings could solidify the company’s AI growth story, according to Citi analyst Michael Rollins. Rollins upgraded the stock to neutral from sell and raised his price target to $3.15 per share from $1.25, implying room for upside of about 21.6%. The stock surged more than 42% in premarket trading on Monday ahead of the earnings release after the market close. Lumen recently announced new deals worth $5 billion with cloud and tech companies, signaling a $7 billion revenue pipeline as more companies get into AI. Lumen provides network services for data centers. “The announced new business will likely provide the company with financial flexibility, ultimately reducing net debt ratios and improving future financial performance, opening up strategic scenarios including an eventual divestiture of ILECs and business units,” Rollins said in a note. — Pia Singh 6:10 a.m.: Stiefel recommends buying GE Healthcare Investors should buy GE Healthcare shares, and the company is poised for accelerated growth over time, according to Stiefel. Analyst Rick Wise has a buy recommendation on GE Healthcare and a $100 price target, suggesting a 22.7% upside. The stock has gained 5.4% this year. “We believe GEHC is staged favorably for mid-single-digit (or higher) growth, significant operating margin expansion, and strong FCF generation,” Wise said in a note. GE Healthcare is “the epitome of a classic medical technology spinoff,” according to the analyst, and will benefit from improved management and commercial execution, increased focus on cost reduction, innovation-related investments, and M&A that will help drive growth and margins. The company’s end markets total roughly $87 billion and should grow at a mid-single-digit pace annually, he said. Wise also pointed to “undervalued” early-stage pharmaceutical diagnostic products Flurpiridus and Visamil, which he said could boost the company’s revenue growth potential over the long term. — Pia Singh 5:49 a.m.: Piper Sandler upgrades Crowdstrike, says investors should buy on the dip Piper Sandler believes Crowdstrike can recover strongly from the crisis surrounding the global tech outage and thinks investors should take advantage of the event.Analyst Rob Owens upgraded the global cybersecurity company to overweight from neutral and lowered his price target by $20 to $290, which implies an upside of 30.6%. He lowered his target due to a forecast cut in the stock’s price, but he believes the stock is currently trading at an attractive risk/reward level. CrowdStrike shares have plummeted 43% in the past month since the company released a software update. The update affected millions of computers running Microsoft’s Windows operating system, causing a global outage across a range of industries. Delta Airlines is seeking damages from CrowdStrike and Microsoft after the outage. CRWD 1M CRWD 1 Month Chart Owens believes CrowdStrike “did a good job” of handling the global outage and maintaining customer relationships. The company’s strong cash flow generation and insurance against these types of incidents should help save Delta money on costs associated with the litigation, Owens said. “While the near-term news cycle will likely revolve around lawsuits, settlements, congressional testimony and a reduction in numbers ahead of the release of second-quarter earnings, we believe the impact of this event will be short-lived and the costs negligible,” Owens said in a note on Tuesday. “Stocks have fallen sharply this month, and we believe investors should opportunistically build positions at current levels.” — Pia Xin 5:49 AM: Morgan Stanley Names Taiwan Semiconductor a Top Pick According to Morgan Stanley, investors should consider buying the recent dip in Taiwan Semiconductor shares. The bank named the chipmaker its top pick and maintained an overweight rating on the stock. Its price target of NT$1,200 suggests an upside of 36.4%. TSM Mountain 2024-06-28 Taiwan Semiconductor’s third-quarter TSM is under pressure this quarter as investors reduce their exposure to the tech company after a strong start to the year.Q1 to date, U.S.-listed TSM is down 14.9%. “We like TSMC’s quality and defensive nature in the extended semiconductor downcycle. Confirmation of price growth and continued strength in AI capex should be key catalysts,” analyst Charlie Chan wrote. “After the recent broad sell-off in the sector, we believe TSMC is again attractive at 16 times projected 2025 EPS due to higher quality company operations and financial outlook,” Chan added. — Fred Imbert
