Nvidia Inside: Microsoft's New Laptop Runs AI Agents Without the Cloud
Microsoft will unveil an Nvidia-powered Surface Laptop Ultra running AI agents locally, challenging Intel and AMD as high memory costs raise prices.
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Evercore ISI Group analyst Kirk Materne maintains Microsoft (NASDAQ:MSFT) with a Outperform and raises the price target from $528 to $635.
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Microsoft will unveil an Nvidia-powered Surface Laptop Ultra running AI agents locally, challenging Intel and AMD as high memory costs raise prices.
Broadcom's AI semiconductor revenue surged 221% year-over-year in Q3, driven by custom AI accelerators (XPUs) designed with hyperscalers like Google, Meta, and OpenAI. Custom chips offer better power efficiency, faster inference, and higher returns on capital compared to GPUs, making them increasingly attractive as hyperscalers face capital constraints. While Nvidia's data center business is currently 4x larger, custom silicon is winning by volume among major customers and could eventually become a bigger business than GPUs.
SpaceX stock has declined 29% from its peak and trades at an expensive P/S ratio of 94, suggesting potential further downside. Microsoft is presented as a better investment alternative, trading at a more reasonable valuation (P/S of 11.6, P/E of 28.8) while benefiting from dominant positions in enterprise AI through Copilot and Azure cloud services, which is experiencing accelerating growth at 43% in Q4.