The artificial intelligence boom continues to reshape the tech industry, with companies across various sectors reporting significant impacts on their performance and strategies. Nokia, for instance, saw its third-quarter earnings surpass expectations, driven by a surge in demand for its communication equipment from the AI sector, particularly for data centers. This led to a 12% increase in adjusted net sales and a raised annual profit forecast. Meanwhile, in the AI hardware space, Nvidia remains a key player, supplying essential components for data centers, with its Q2 data center revenue reaching $41.1 billion. Palantir Technologies is also experiencing strong growth, particularly in its U.S. commercial business, which saw a 93% year-over-year revenue increase in Q2, alongside new government contracts. In the software and platform realm, Letter AI secured $10.6 million in Series A funding to expand its AI platform for revenue teams, which has already been adopted by companies like Adobe. Starbridge also raised $42 million for its AI platform focused on government sales, aiming to simplify procurement processes. Snowflake's integration of AI is a key growth driver, leading Wedbush to raise its price target for the company. However, a Kyndryl report highlights a growing gap, with enterprise spending on AI increasing by 33% but less than a third of organizations feeling their workforce is ready. Amidst these developments, Microsoft is identified by Morningstar analyst Dave Sekera as the last remaining undervalued major technology stock. In the competitive AI chip market, analysts are favoring AMD over Intel for investment, citing AMD's MI300 series and partnerships with OpenAI and Oracle as strong indicators of its potential in the data center and AI accelerator markets.
Key Takeaways
- Nokia's third-quarter earnings exceeded expectations, driven by strong demand for its communication equipment from the AI sector, leading to a 12% increase in adjusted net sales and a raised annual profit forecast.
- Nvidia's data center revenue reached $41.1 billion in Q2, underscoring its critical role in supplying hardware for the AI ecosystem.
- Palantir Technologies reported a 93% year-over-year revenue increase in its U.S. commercial business in Q2 and has secured new government contracts.
- Letter AI raised $10.6 million in Series A funding to expand its AI platform, which assists revenue teams and has been adopted by clients including Adobe.
- Starbridge secured $42 million to enhance its AI-driven platform designed to streamline government sales processes.
- Wedbush raised its price target for Snowflake to $270, citing the company's expanding AI integration as a key growth factor.
- A Kyndryl report indicates a 33% rise in enterprise AI spending, yet over half of organizations face technology limitations, and less than a third feel their workforce is ready for AI.
- Microsoft is considered the last undervalued major technology stock by Morningstar analyst Dave Sekera.
- Analysts favor AMD over Intel for AI chip investments, highlighting AMD's MI300 series and its partnerships with OpenAI and Oracle.
Nokia earnings beat expectations driven by AI demand
Nokia reported better-than-expected earnings for the third quarter, largely due to increased demand for its communication equipment from the artificial intelligence sector. While operating profit saw a year-over-year decline, it was less than feared. Adjusted net sales grew 12% to 4.83 billion euros, surpassing forecasts. The company also raised its annual operating profit forecast. CEO Justin Hotard noted strong sales across divisions, especially optical networks, driven by AI and data center customers. Nokia plans to reveal a new strategy on November 19.
Nokia profit exceeds expectations thanks to AI and cloud demand
Nokia announced third-quarter profits that surpassed expectations, boosted by strong demand for optical and cloud services, including sales to AI-driven data centers. The company's comparable operating profit reached 435 million euros ($507 million). This positive result comes after Nokia had previously issued a profit warning in July due to factors like U.S. tariffs, a market slowdown, and a weaker dollar.
Nokia stock jumps on strong Q3 results fueled by AI and cloud
Nokia's stock saw a significant rise in premarket trading after the company reported third-quarter adjusted profits that exceeded analyst estimates. This performance was driven by increased sales in its Optical Networks division, which grew 19% due to demand for AI and cloud services. The company also highlighted growth in optical components, supported by a new semiconductor facility and the launch of 800G optical products. Nokia anticipates a comparable operating profit between 1.7 billion and 2.2 billion euros for the year.
Palantir vs Nvidia Which AI Stock is a Better Buy
Both Palantir Technologies and Nvidia have seen significant stock price increases due to the recent AI boom. Palantir's U.S. commercial business is its fastest-growing segment, with Q2 revenue up 93% year over year, and it has secured new contracts with government agencies. Nvidia is a key player in the AI ecosystem, supplying essential hardware for data centers, with its Q2 data center revenue reaching $41.1 billion. While both companies have high valuations, Nvidia's business is considered more scaled and mature, making it the preferred investment for long-term potential despite associated risks.
Letter AI raises over $10 million for AI platform growth
Letter AI has successfully raised $10.6 million in Series A funding to expand its AI platform, which helps revenue teams improve performance. The funding round was led by Stage 2 Capital and included other investors like Lightbank and Y Combinator. The company has seen its customer base grow fifteenfold in the past year, with major clients such as Lenovo and Adobe adopting its AI tools for sales enablement. Letter AI's platform offers features like personalized training, real-time coaching, and an AI-powered content hub.
Kyndryl report shows AI investment rising but workforce lags
Kyndryl's second annual Readiness Report indicates that while 90% of organizations believe they can scale innovation, over half face limitations due to their technology. Furthermore, less than a third feel their workforce is ready for AI. The report also highlights a 33% increase in enterprise spending on AI, with cybersecurity being the top investment priority. These trends could significantly impact Kyndryl's investment case.
Starbridge raises $42 million for AI government sales platform
Starbridge has secured $42 million in funding to enhance its AI-driven platform designed for government sales. The platform aims to simplify the complex government procurement process by consolidating data and providing sales teams with actionable insights. It uses AI-powered scoring models to prioritize public sector accounts based on their likelihood to purchase new technologies. This funding brings Starbridge's total financing to $52 million and will support the integration of its platform into widely used tools like CRMs.
Wedbush raises Snowflake price target to $270 on AI integration
Wedbush analyst Dan Ives has increased his price target for Snowflake (SNOW) to $270 from $250, maintaining an Outperform rating. The upgrade is based on Snowflake's expanding integration of artificial intelligence, which is seen as a key factor for future growth. Ives believes Snowflake is well-positioned to benefit from the increasing demand for its data cloud platform driven by the AI trend. This positive outlook reflects confidence in Snowflake's ability to use AI to improve its services and attract more customers.
Nokia sales rise with AI demand but investments impact profits
Nokia reported a 12% year-over-year increase in sales for the third quarter, reaching approximately 4.8 billion euros, driven by strong demand in its networking infrastructure group, particularly for optical and data center equipment supporting AI. However, profitability was affected by increased investments in research and development for optical networks and a reduction in venture fund investments. While operating profit was 435 million euros, a significant portion came from its Nokia Technologies licensing business. The company is focused on regaining leadership in networking, similar to Cisco's past success.
Analyst: Microsoft is the last undervalued AI stock
Morningstar analyst Dave Sekera believes Microsoft Corporation is the last remaining undervalued major technology stock. While many other large tech companies are becoming overvalued, Microsoft still presents an opportunity for investors. Microsoft is also considered a trending stock that investors are closely watching in the fourth quarter.
Analyst picks AMD over Intel for AI chip investment
Analyst Kevin Cassidy from Rosenblatt favors Advanced Micro Devices (AMD) over Intel for AI chip investments. AMD's MI300 series positions it as a strong competitor to Nvidia in the data center and AI accelerator markets, with recent deals including a partnership with OpenAI and an expansion with Oracle. Cassidy expects AMD to perform well, citing strong revenue growth and improving margins. While Intel is working to revitalize its position in the AI chip market with government support and new facilities, Cassidy's analysis suggests AMD currently offers a more compelling investment opportunity.
Sources
- Nokia Q3 earnings beat expectations on AI-fueled sales growth By Investing.com
- Nokia posts profit beat as AI, cloud demand boost optical sales
- Nokia stock surges after Q3 profit beat estimates as AI, cloud demand boost optical sales
- Better Artificial Intelligence (AI) Stock: Palantir vs. Nvidia
- Letter AI secures over $10 million as customer base grows 15x
- Rising AI Investment and Workforce Challenges Might Change the Case For Investing In Kyndryl (KD)
- Starbridge Secures $42 Million For AI-Driven Government Sales Platform
- Wedbush Raises Snowflake (SNOW) Price Target to $270, Citing Expanding AI Integration
- Nokia boosted by AI demand but investments hurt margins
- Analyst Says Microsoft (MSFT) ‘Last of’ Undervalued AI Stocks
- AMD or INTC: Top Analyst Kevin Cassidy Chooses One AI Chip Stock to Buy (and One to Dump)