A Nvidia HGX H100 server on the Yotta Knowledge Companies Pvt. information heart in Navi Mumbai, India, on Thursday, Mar. 14, 2024.
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Notable expertise trade analyst Dan Ives says Huge Tech firms and personal fairness corporations are gearing as much as make a flurry of acquisitions to remain forward within the AI arms race. The analyst shared his picks for shares which might be prime acquisition targets because the dealmaking growth will get underway.
“With the regulatory panorama changing into extra lenient to acquisitions with the brand new administrations stepping in and now not representing steep hurdles, we imagine that the tech M&A floodgates are able to be opened as extra alternatives come up so as to add accretive property with a better path ahead,” Ives mentioned late Wednesday notice to Wedbush Securities shoppers.
Over the previous few months, a number of expertise corporations have entered into offers to promote their companies to AI and AI-adjacent corporations. Core Scientific agreed in July to promote its information heart enterprise to CoreWeave in a $9 billion all-stock deal. Across the identical time, Palo Alto Networks introduced it could purchase CyberArk, an Israeli safety agency valued at $25 billion, whereas NiCE unveiled plans to buy consumer-focused generative AI firm Cognigy for almost $1 billion.
Ives pointed to C3.ai and Sandisk as being among the many prime M&A targets, whereas Apple and IBM are more than likely to be extremely acquisitive throughout this AI merger wave as a result of the 2 Huge Tech firms need to play catch up within the AI race.
“Whereas loads of funding is anticipated to construct AI use circumstances, we anticipate important consolidation inside the area over the following 5-10 years as extra area of interest use circumstances for AI will probably be picked up and added to rising AI product portfolios from large-scale tech gamers and different monetary patrons to capitalize on the exploding demand for AI throughout each enterprise and federal landscapes,” Ives wrote.
Listed below are the analyst’s high publicly traded takeover candidates.
Ives inventory picks for AI-related M&A
| Tickers | Firms | Inventory Efficiency (YTD) |
| TENB | Tenable Holdings | -25.66% |
| QLYS | Qualys | -6.33% |
| AI | C3.AI | -48.85% |
| LYFT | Lyft | 68.33% |
| TRIP | TripAdvisor | 4.47% |
| SNDK | Sandisk | — |
Supply: Wedbush Securities
Sandisk shares have surged greater than 200% for the reason that inventory started buying and selling underneath the ticker SNDK in February. Lyft and Tripadvisor are up 68% and 5% for the reason that starting of this yr, respectively.
Nevertheless, Tenable Holdings inventory fell 26% this yr, whereas C3.ai shares plunged 49% over the identical interval. Qualys shares slid roughly 6% within the yr thus far.
