Jefferies advised to buy 3 stocks after the "soft apocalypse". AI is not a threat to them

The decline in quotations of companies from the software sector in early February created an attractive opportunity to buy shares of three companies - Snowflake, Microsoft and Intuit, says Jefferies. An analyst of the investment bank believes that the market's fears about artificial intelligence are now excessive.

Jefferies analyst Brent Till reiterated Buy ratings for shares of Snowflake, Microsoft and Intuit, Barron's reports. His target price for each of the securities is $300, $675 and $850, respectively - up 70%, 63% and 94% from their closing levels on Monday, February 9.

According to the analyst, while the shift to AI is shaking up the economy more than cloud technology once did, it is those companies that are able to adapt quickly that will be the long-term winners.

There are several catalysts for a recovery in software developer stocks: these include accelerating revenue growth from AI tool sales andgreaterclarity on partnerships with leading AI model vendors.

"We believe that some fears about AI are exaggerated and ultimately it is software that benefits, although incumbent market players need to remain agile and reposition themselves with the latest AI technologies," Till wrote (quoted in Barron's).

In trading on February 9, Snowflake shares rose 4.5% to $175.95. Microsoft shares added 3.1% to $413.6, while Intuit shares fell 1.4% to $437.5.

Most analysts recommend buying Snowflake stock: it has 40 Buy ratings and four Overweight ("above market") ratings versus only seven Hold (advice to hold), MarketWatch shows. There are no Sell tips. The average target price of $286.27 implies a 63% upside to the stock.

Analysts are also almost unanimously recommending buying Microsoft stock, although it has received two downgrades from Buy to Hold in the past week. The average target of $594.91 is 44% higher than the current price.

The number of tips to buy Intuit shares has increased from 27 to 30 (out of 35 total) over the past three months. The company has an average target price of $790.9, which implies analysts' estimates for the stock to appreciate by nearly 80% from the last closing level.

This article was AI-translated and verified by a human editor