Nvidia to get a boost from new chip, Ralph Lauren poised to jump

(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.) Tuesday’s analyst calls focused on red-hot tech giant Nvidia, which is seen as benefitting from the release of its new Blackwell chip, the GB200. “Our sense is that demand for GB200 server racks is very strong,” a UBS analysts wrote. In the retail world, Jefferies sees good things ahead for high-end firm Ralph Lauren, which is expected to benefit as young people are drawn to the company’s wide product mix. There was also more bad news for Chegg, which Jefferies downgraded on worries over the impact from artificial intelligence. Check out the latest calls and chatter below. All times ET. 7:02 a.m.: Deutsche Bank sees 33% upside for Live Nation on strong fundamentals Strong fundamentals could spell further upside for shares of Live Nation Entertainment , according to Deutsche Bank. The bank initiated coverage of the entertainment company at a buy rating. Shares of Live Nation have slipped 3% this year, but analyst Benjamin Soff’s $120 price target implies that the stock could rally 33% from its current price. “The bottom line of our call is this: We believe the company will deliver consistent double-digit growth in [adusted] operating income in the coming years,” the analyst wrote. “In our view, this robust growth outlook, and the company’s favorable market positioning justify a premium valuation for Live Nation.” For one catalyst, Soff pointed towards strong supply-demand fundamentals that should drive robust growth in the long term. These factors include an underpenetrated international market, the ongoing shift in consumer spending towards experiences, an increasing number of artists going on tour and the rise of social media and music streaming making new artist discovery easier than before. Additionally, Live Nation has taken careful initiatives to improve its business monetization, including investing in its portfolio of owned and operated venues and building out new ticket optimization pricing models. Soff also applauded the company for expanding into new add-on services, including providing upselling opportunities and selling advertising on the Live Nation app. Although a potential regulatory investigation could curtail the stock, Soff doesn’t believe that Live Nation stock will ultimately take much damage. “In our view the most likely outcome of a potential regulatory investigation will be pro-consumer reforms, which shouldn’t be materially disruptive to Live Nation’s business opportunity and not a more drastic structural remedy,” the analyst wrote. — Lisa Kailai Han 6:33 a.m.: Mizuho lists DoorDash and Airbnb as two of its top stock picks DoorDash and Airbnb are Mizuho’s top two stock picks in the gig economy services industry. Mizuho currently has a buy rating on both stocks. Food delivery platform DoorDash is up 34% on the year, while vacation property rental company Airbnb has gained 19%. Mizuho’s $162 price target for DoorDash implies that the stock could rally 23% from its current price. Analyst James Lee said there could be further upside for the company’s 2024 full-year earnings guidance. “We believe key drivers include continued share gains from its category-leading position in the US and rational competition in Europe. In conjunction, favorable unit economics from good labor supply provides incremental profitability support in our view,” he wrote. Lee’s $200 price target for Airbnb is 23% higher than where its stock closed on Monday afternoon. The analyst believes that Airbnb’s advertising product could drive meaningful long-term upside. Additionally, Airbnb could gain further market share from hotels if the company is able to increase the affordability of its prices, especially as the Paris summer Olympics approach. “We believe risk/reward is positive into the quarter given reasonable expectations of FY24 at 11% with tailwinds from the Paris Olympics and share gains from elevated hotel pricing,” the analyst said. — Lisa Kailai Han 6:10 a.m.: ET Chegg’s core business could be hurt by new AI headwinds, Jefferies predicts With artificial intelligence-powered tools on the rise, Jefferies sees a difficult path ahead for Chegg. Analyst Brent Thrill downgraded the educational technology firm to an underperform rating from hold in a Tuesday note. He accompanied this move by lowering his price target for Chegg stock to $4 from $7, which corresponds to a 44% decline in the stock’s price. Shares of Chegg have already slipped nearly 37% in 2024 and tumbled another 12.7% in premarket trading. While artificial intelligence has been a tailwind for many companies, Thrill believes that Chegg’s growth trajectory could actually be hurt by the advent of such programs. The analyst pointed to the company’s disappointing second-quarter guidance as evidence of upcoming headwinds. “Looking ahead, we question the durability of CHGG’s paid subscription model in the new AI world where free AI tools have become a viable alternative to CHGG’s previous dominant positioning,” he wrote. “We find it difficult to believe that fundamental momentum will return to the business and believe CHGG is misguided in its attempts to maintain its margin level when it should be investing for growth.” 6:03 a.m.: Jefferies initiates Ralph Lauren at a buy, sees momentum with younger consumers Ralph Lauren is shaping up to be a quality growth stock, according to Jefferies. The financial firm initiated shares of Ralph Lauren at a buy rating, simultaneously setting a price target of $195. This implies that the fashion stock could rally 17% from where it closed on Monday afternoon. As a catalyst, analyst Ashley Helgans pointed to Ralph Lauren’s improving fundamentals. The “company has been successful in elevating portfolio as witnessed by average unit retail gains of > 70% the last several years, which have been driven by fewer promos, mix, and to smaller extent like for like pricing, limiting elasticity,” she wrote. Emerging high-growth categories, which include home goods, handbags and outerwear should continue to drive margin expansion, the analyst added. Additionally, the company’s shift towards a direct-to-consumer mix should also give Ralph Lauren better control over its branding and lessen its wholesale risk. Helgans also noted that new customer acquisition, which has skewed younger, has also helped the company’s evolution and growth prospects. “A bigger focus on data analytics, bolstered social media presence, increased marketing, and celebrity status (e.g. worn by Taylor Swift on cover of TIME magazine) are also helping awareness and brand heat,” she wrote. Shares of Ralph Lauren are currently up 16% for the year. — Lisa Kailai Han 5:53 a.m.: UBS sees 31% upside for Nvidia on back of newest Blackwell chips Nvidia’s new chip means good things for its share prices in the next year, according to UBS. UBS reiterated its buy rating for the software firm, which specializes in producing graphics processing units. Analyst Timothy Acuri also increased his price target for the firm to $1,150 from $1,100, indicating a 31% upside from Nvidia’s Monday close. Shares of Nvidia have already soared an eye-watering 77% in 2024 though they were off 0.6% in premarket trading Tuesday. Acuri highlighted Nvidia’s new Blackwell chip, the GB200, as a catalyst. While the analyst had initially estimated the chip to be around 3% of Nvidia’s GPU mix in 2025, he revised the figure to around 37%. Unlike Nvidia’s GH200 Hopper chip, the GB200 is better capitalized for artificial intelligence trainings and inference at scale. Therefore, companies such as Microsoft, Amazon, Alphabet, Meta and Oracle are set to order large volumes of the GB200 chip in 2025, Acuri said. “Our sense is that demand for GB200 server racks is very strong — to some extent being driven by rapidly increasing bottlenecks in power infrastructure components, which is driving US hyperscalers to focus more on maximizing performance in a given footprint,” the analyst wrote. Acuri noted, however, that the Hopper chip is probably staying “stronger for longer” as shipments of the Blackwell chip are delayed until at least late November or December of this year. — Lisa Kailai Han — CNBC’s Michael Bloom contributed to this report.