Oklo stock tumbles as Financial Times scrutinizes valuation
Investing.com -- Barclays said it is becoming “more selective with names that have direct AI exposure” ahead of third-quarter earnings, recommending that investors consolidate risk around large-cap leaders Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and AMD (NASDAQ: AMD).
“We still believe we are in the early innings of an AI investment cycle,” Barclays wrote, but added that “certain stocks are pricing in much of the full benefit of AI deployment.”
The bank expects “AI exposed names in our coverage still have potential for strong beats and raises,” but warned that “some ‘selling the news’” could follow given “the bar is high.”
Barclays downgraded Marvell Technology (MRVL), Astera Labs (NASDAQ: ALAB), and Lumentum (NASDAQ: LITE) to Equal Weight, saying the “risk/reward for various reasons looks less attractive compared to other AI involved names.”
The firm said Marvell’s “ASIC story into CY26 is less robust than initially expected” and that Astera is “undergoing a major product transition from the retiming portfolio to the switching products.”
It also cited Lumentum’s sharp rally, noting the stock “has seen a run-up of close to 60%” in the past three months, making its “risk-reward profile more attractive for peers.”
The analysts upgraded KLA Corp. (NASDAQ: KLAC) to Overweight, calling it “positive on the long-term outlook for increased process control intensity” and its “exposure to Leading Edge where we expect strong growth looking ahead.”
Among stocks where Barclays sees upside risk are AMD, Broadcom, Marvell, Micron, Nvidia, and Western Digital, while it sees downside risk for Astera Labs , Marvell, and Texas Instruments.
“China will again be a major thematic,” the note said, with KLA and Lam Research “needing to take down numbers on BIS exposure.”