Famed Apple Inc. (NASDAQ:AAPL) champion Gene Munster weighs in on the tech giant’s newest move- a “dark data” takeover of Lattice Data, which he ventures will bolster Siri to be well-equipped for a future artificial intelligence-inspired world. Meanwhile, one of the best analysts on the Street, Mark Mahaney sees no gamble in betting on Alibaba Group Holding Ltd (NYSE:BABA), even if investors shied briefly away after quarterly results were delivered. The RBC Capital just sees a quarter of beats from the Chinese e-commerce giant and expects the momentum to keep right on rolling forward. Let’s dive in:

Apple’s Savvy Acquisition Playbook

Apple has decided to take on “dark data” mining company Lattice Data, formerly under the wing of Stanford’s research team as a DeepDive project. What does Apple expert Gene Munster – imparting observations from his new research-driven, venture capital firm Loup Ventures – believe is the strategy behind the M&A play? It all comes down to Siri, which would make the iPhone buzzier than ever.

Munster notes that roughly 70 to 80% of all internet data is unstructured- dark- and with Lattice Data’s technology, Apple could use artificial intelligence (AI) to unlock this untapped data, “making it more useful.” It’s a move straight out of the tech giant’s “acquisition playbook,” the research analyst praises, explaining that “While Apple has not made it clear how it will use Lattice Data’s technology, we expect the company to leverage Lattice technology to improve Siri.”

For example, by accessing this dark data that is currently unusable, Siri could become much more effective in our daily lives. Siri would be able to answer our obscure questions about odd historic events, have a better understanding of which movie theater we are talking about, or even find the exact hot dish recipe that we are looking for.”

Traditionally, the giant’s game is to “Buy companies that have a kernel of something special that Apple can put its significant resources behind to build into something even more amazing.” In the past, the analyst remembers P.A. Semi was used to improve iPhone processors, Siri was utilized “to build Siri,” and the Apple team relied on Authentec to create the Touch ID. Even Beats helped make Apple Music was it is today.

“In these instances, Apple took new technology and incorporated it into its platform soon after. It was clear that Apple was making an investment in a core technology,” contends Munster, asserting, “And with Lattice Data it’s clear that Apple is making an investment in AI.”

TipRanks analytics show AAPL as a Strong Buy. Out of 31 analysts polled by TipRanks in the last 3 months, 26 are bullish on Apple stock while 5 remain sidelined. With a return potential of nearly 6%, the stock’s consensus target price stands at $161.61.  

Alibaba Will Continue to Ride the Tide of Impressive Trends

Alibaba served up a beat yesterday with its fiscal fourth quarter earnings for the year, but shares took a slight 2% stumble nonetheless with unexpectedly high taxes. This morning, shares already back on the rise and top analyst Mark Mahaney at RBC Capital does not see any reason to be anything but bullish on this Chinese e-commerce giant. In reaction to the print, the analyst reiterates an Outperform rating on shares of BABA while upping the price target from $120 to $140, which represents a 14% increase from where the stock is currently trading. Moreover, the analyst has raised his revenue expectations for fiscal 2018 5% up to 217B RMB and has boosted Adjusted EBITDA for fiscal 2018 4% to 99.7B RMB.

Mahaney commends the giant’s results that “beat across the board,” highlighting, “BABA posted strong March Quarter results, beating the Street on Revenue and EBITDA. Key – Core Commerce growth of 46% Y/Y remains robust and driven by strong Marketing Services revenue and solid Commission revenue. Cloud continues to scale while demonstrating hyper-growth in a large TAM.”

For the fourth fiscal quarter of 2017, the giant brought in 38.6b RMB, which marks a 60% year-over-year rise in revenue that includes acquisitions, outperforming both the analyst’s estimate of 37.5B as well as the Street’s forecast of 35.9B, with adjusted EBITDA of 16.6 RMB topping the analyst’s 15.4B and the Street’s 15.6B expectations.

Most of the stellar performance the analyst attributes to core commerce, which drove 82% of revenues this quarter, with Cloud surpassing Mahaney’s expectations but Digital Media & Innovation coming in just under. Marketing Services did great, showing a 46% year-over-year climb, thanks to traffic coupled with clicks volume. As Online Marketing Services ascends, the analyst anticipates forthcoming product updates will only fire up growth further.

Perhaps the one piece of the puzzle that disappointed investors lies in adjusted EBITDA margin of 43%, which while certainly a solid result, took a dip year-over-year. More can be expected from BABA’s Investor Day at the start of next month.

Overall, “Fundamental trends remain impressive – particularly premium growth rates (46% Y/Y) in Core Commerce, as brands/merchants ramp advertise spending on BABA’s massive platform. Further, the Cloud segment continues demonstrating increasing scale (nearly 1MM customers) and hyper-growth (103% Y/Y) while approaching breakeven. Finally, BABA continues to demonstrate high levels of profitability […] These trends are impressive and we think sustainable. We continue to view BABA as a Premium-Growth/Premium-Profit Asset and view the ~40% run-up in shares YTD as fully warranted and current valuation still reasonable,” the analyst concludes with surging confidence behind BABA.

Mark Mahaney has a very good TipRanks score with a 71% success rate and a high ranking of #26 out of 4,560 analysts. Mahaney earns 18.7% in his annual returns. When recommending BABA, Mahaney yields 24.7% in average profits on the stock.

TipRanks analytics demonstrate BABA as a Strong Buy. Based on 12 analysts polled by TipRanks in the last 3 months, 12 rate a Buy on Alibaba stock while 2 maintain a Hold. The 12-month average price target stands at $131.90, marking a nearly 9% upside from where the stock is currently trading.