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Investing.com -- Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
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Apple can’t sit out the GenAI race, analyst warns
Needham warned that Apple (NASDAQ:AAPL) risks falling further behind in the generative AI race, urging caution ahead of the company’s upcoming third-quarter earnings. In a note published Friday, the broker said Apple must outline a clear AI strategy or face growing pressure from investors and the media.
“We do not believe that Apple can remain on the sidelines, without a clearly articulated GenAI strategy and action plan,” analyst Laura Martin wrote.
She pointed to the widening technology gap.“By implication, iOS is falling farther behind Android every quarter,” and called this an “existential risk” for a company so heavily reliant on iPhone-driven hardware and services revenue.
Martin warned about potential rising expenses as Apple seeks to catch up, noting that the tech giant may soon reveal “a multi-billion dollar/year license deal” with Anthropic or another LLM provider, or lift its capex guidance to fund a proprietary GenAI infrastructure.
She also warned that if Apple fails to integrate GenAI into its product ecosystem, it "will lose its best AI employees to META (NASDAQ:META), OpenAI, Anthropic, etc."
Pressure on CEO Tim Cook is mounting amid Apple’s slow rollout of AI. The stock is down 14% year-to-date, underperforming the S&P 500’s 8% gain, which Martin said reflects investor frustration over Apple’s strategic lag.
Unlike Google (NASDAQ:GOOGL) and Amazon, which are already monetizing cloud-based LLM services, Apple lacks a clear GenAI revenue stream. That puts it at a disadvantage, especially as its forward price-to-earnings (P/E) multiple remains elevated at 27.7x despite slower growth.
“We believe that AAPL’s share price will fall once investors understand the investment levels required to catch up with the other Big Tech conglomerates that were early adopters of GenAI,” Martin wrote.
Amazon stock price target hiked at BofA ahead of results
Bank of America (BofA) raised its price target on Amazon (NASDAQ:AMZN) to $265 from $248 while reaffirming a Buy rating, citing expectations of a strong second-quarter performance and improving prospects for Amazon Web Services (AWS) in the second half (2H) of the year.
Ahead of Amazon’s July 31 earnings release, BofA slightly raised its estimates, now forecasting second-quarter revenue of $164 billion, above the $162 billion consensus. The bank also expects profit to reach $17.8 billion, ahead of the Street’s $17.0 billion and Amazon’s top-end guidance of $17.5 billion.
Analysts said their confidence is supported by internal card transaction data and Bloomberg Second Measure, which both signal stronger-than-expected retail momentum. “We therefore expect Amazon N.A. to beat Street estimates by 2%+,” the note said.
In international markets, BofA expects foreign exchange gains to boost results. “The Euro was up 5% y/y and 8% q/q vs the U.S. dollar, which should aid International revenues,” analysts wrote.
Looking ahead, BofA anticipates third-quarter revenue guidance between $169 billion and $174 billion, with GAAP EBIT guidance of $14.0 billion to $18.0 billion—below the consensus of $19.4 billion.
The bank highlighted recent AWS job cuts as a possible support for margins in the second half, while also pointing to stronger AI-related demand and backlog momentum.
“AWS key stock driver in 2H‘25,” it said.
Despite trading at 13.4x 2026 EV/EBITDA, BofA believes the stock has “multiple expansion potential.”
Analyst upgrades AMD to Buy on strong GPU, CPU demand
Erste Group lifted its rating on AMD (NASDAQ:AMD) shares to Buy from Hold, highlighting strong growth prospects driven by rising demand for high-performance computing in data centers.
Analyst Hans Engel said AMD is well-positioned for 2025, with expected gains in both CPUs and GPUs supporting further expansion.
“For 2025, AMD sees further growth based on the increasing demand for high-performance CPUs and GPUs in data center environments,” he wrote.
Engel added that operating margins are set to improve over the medium term, which should lead to a notable acceleration in profit growth next year.
“The stock price should continue to rise due to the company’s good growth prospects,” the analyst said.
ASML (AS:ASML) best-positioned semicap name for 2026, broker says
New Street Research upgraded ASML (NASDAQ:ASML) to Buy on Thursday, setting a €790 price target and pointing out the company’s strong long-term positioning in the semiconductor equipment (semicap) sector.
While market consensus projects just 2% revenue growth for ASML next year—well below the 6% to 12% range expected for peers—New Street views that forecast as overly cautious. The brokerage believes ASML’s “high leading-edge exposure” gives it room to outperform.
Analysts pointed to the company’s advantages in advanced chipmaking tools, particularly as spending on leading-edge wafer fab equipment (WFE) gains momentum. They added that ASML faces “limited risk of share loss in China,” which should allow it to grow “in the upper end of its peer group.”
A normal pace of order intake in the third quarter would also help reassure investors about the 2026 outlook, the firm said.
Valuation was another support for the upgrade. ASML shares are currently trading at 25 times forward earnings, which New Street noted is below both historical levels and peers like KLA. That suggests “limited risk of further de-rating.”
Despite ongoing uncertainty around overall WFE spending, New Street expects ASML to stand out.
“Within the group, we expect ASML to outperform,” it said.
The €790 target is based on a 25x multiple of projected 2027 earnings of €31.9 per share.
AI will ’destabilize domestic politics and international security’: BCA’s Gertken
BCA Research warned that AI is set to disrupt both domestic politics and global security, following recent moves by President Trump to accelerate U.S. AI innovation and pressure the Federal Reserve on interest rates.
In a note, Chief Geopolitical Strategist Matt Gertken said the developments reflect “deeper questions about political and geopolitical changes amid the explosive growth of artificial intelligence.”
“Artificial intelligence will destabilize domestic politics and international security,” Gertken wrote, cautioning that advances in AI could heighten polarization within the U.S. and increase distrust among global powers.
He expects the U.S. to respond with higher corporate taxes and “more creative fiscal policy,” particularly targeting tech firms. On the geopolitical front, AI-driven military advances are likely to “increase strategic distrust,” while faster information flows may not lead to stronger international cooperation.
Gertken said that these forces could intensify market volatility and accelerate changes in economic policy, with AI acting as a destabilizing factor for years to come.