Nvidia a top AI pick, Tesla cutting prices too much?

(This is CNBC Pro’s live coverage of Tuesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) Nvidia and two electric vehicle makers were in focus in the analyst chatter for Tuesday. Baird named Nvidia a top artificial intelligence/machine learning play, calling for a more than 20% gain in the stock. Meanwhile, Goldman Sachs noted Tesla and Rivian need to be careful when cutting prices. Check out the latest calls and chatter below. All times ET. 6:07 a.m.: Morgan Stanley downgrades Sunnova, slashes target price Despite having increased uncertainty around Sunnova’s growth case, Morgan Stanley thinks the company’s discounted trading levels could generate strong returns. Analyst Andrew Percoco downgraded shares to equal weight from overweight and slashed his price target by $10 to $14, which still suggests nearly 103% potential upside for the stock. “We believe there is a large dislocation between NOVA’s stock price and the value of the company’s asset base, but we see a less clear path to realizing that value over the next 12 months, driving our decision to downgrade the stock,” the analyst wrote in a Monday note. NOVA YTD mountain NOVA year to date Percoco said he expects a “volatile and challenging short-term trading environment” for the stock as the market digests Sunnova’s funding structure and free cash flow generation. Upside catalysts for the stock include lower interest rates — which tend to help residential solar project financing — and Sunnova’s execution of its 2025 cash generation guidance of between $200 and $500 million. Sunnova shares have declined more than 55% year to date and roughly 62.2% over the past year. — Pia Singh 5:45 a.m.: Baird names Nvidia a top AI/ML idea, thinks shares can pop more than 20% Nvidia and several big tech companies, including Amazon and Meta Platforms , are included in Baird’s updated top ideas in artificial intelligence and machine learning. “While the implications of AI vary across sectors, we collectively believe the AI tidal wave is still in the early innings,” Analyst Tristan Gerra wrote in a Tuesday note. “Thus, we are updating our list of companies that we believe have advanced AI capabilities and/or will be the biggest beneficiaries of the rise of AI-powered applications.” Gerra noted that Nvidia has been one of the major early beneficiaries of the AI momentum, but that it’s growth is “more than hype.” Baird’s $1,050 price target suggests shares can still climb more than 23%. Nvidia’s stock, which is up more than 72% this year, edged lower 1.2% in premarket trading. Meta is a new addition to Baird’s top picks. The firm noted the Facebook owner as a generative AI infrastructure leader alongside Amazon and Google, and said the company is rapidly improving its generative AI capabilities and is well-positioned to continue building AI into customer-facing applications. Baird’s $525 price target implies 5.4% potential upside for Meta shares. The stock is up more than 40% this year, and dipped about 0.7% in Tuesday’s premarket. — Pia Singh 5:45 a.m.: Tesla and Rivian need to be more selective on price cuts, Goldman says Goldman Sachs thinks Tesla and Rivian need to be careful when they cut prices. “Our analysis suggests that Tesla and Rivian should be targeted on additional price reductions in the US that are faster than cost downs, with the Model 3/Y already affordable to many US consumers, and Rivian generally selling to a less price sensitive consumer at ~$70K+ price points,” analyst Mark Delaney wrote. “While our analysis shows that a 1% price reduction generally correlates to a low single digit increase in volume in the mainstream part of the market, we estimate that incremental broad-based price cuts to Model 3/Y would be negative to profit dollars at least in the short-term,” he added. Electric vehicle makers have struggled recently as consumers opt for more internal combustion engine and hybrid cars. Rivian is already down more than 53% this year, while Tesla has lost 24%. TSLA RIVN YTD mountain RIVN and TSLA year to date Delaney has a neutral rating on both stocks. His Tesla target of $220 implies upside of 17%, while his $13 forecast on Rivian points to a 19% gain from here. — Fred Imbert