5 big analyst AI moves: Microsoft, Amazon, Tesla PT hikes; AMD, Broadcom upgraded

Investing.com -- Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

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Wedbush’s Ives raises Microsoft PT to $600 on strong enterprise AI adoption

This week, Wedbush analyst Daniel Ives raised his price target (PT) on Microsoft Corporation (NASDAQ:MSFT) to $600 from $515, pointing to accelerating enterprise AI adoption and increasing momentum around Copilot and Azure.

The broker maintained its Outperform rating and reiterated Microsoft as one of its Best Ideas.

Ives said recent field checks show an “accelerating” pace of enterprise-scale AI deal conversions, with growing use cases across sectors like financials, government, and retail. He described the current period as Microsoft’s “shining moment” as AI drives a new phase of cloud growth.

While fiscal 2025 (FY25) is showing notable traction, Wedbush sees fiscal 2026 as the “true inflection year” for Microsoft’s AI monetization.

“Based on our recent work in the field we believe the next 3 years over 70% of its MSFT installed base will ultimately be on this AI functionality for the enterprise/commercial,” Ives wrote.

Microsoft plans to spend $80 billion in capex in FY25 to support its cloud AI infrastructure, with further investment likely.

Wedbush estimates Copilot could generate up to $25 billion in revenue by FY26 and raised its estimate of incremental AI spend, noting “for every $100 of cloud Azure spend with MSFT the last few years, there is an incremental $50 (was $40) of AI spend.”

Ives said Microsoft continues to lead in cloud AI, despite competition from Amazon and Google (NASDAQ:GOOGL). “We view MSFT as the clear front runner on the enterprise hyper scale AI front,” he wrote, citing strong partner checks around Copilot deployments.

The analyst argues that the market continues to underestimate the scale of Microsoft’s AI-driven opportunity. Wedbush sees this as “the next phase of monetization” as enterprise customers expand AI budgets and deepen their strategic partnerships.

JPMorgan reiterates Amazon as ’Best Idea’

JPMorgan reaffirmed Amazon (NASDAQ:AMZN) as its “Best Idea” following a detailed analysis of its Prime membership program, estimating it now delivers $1,430 in annual value to U.S. members—roughly 10 times the current $139 subscription fee.

The bank expects this expanding value proposition could justify a U.S. price hike in 2026, in line with Amazon’s past four-year cadence.

“We estimate a $20 U.S. Prime price increase could drive ~$3B incremental annualized Net Sales, with further upside from international price raises,” analyst Doug Anmuth wrote in a Wednesday note. He does not expect material churn, referencing the resilience seen during the last increase in 2022.

JPMorgan projects Prime membership to reach 350 million globally in 2025, up from 322 million in 2024. While U.S. growth is plateauing, the bank sees strong potential abroad, noting Prime’s penetration is still just 20–34% across 27 international markets.

“We estimate that increasing Prime’s penetration in existing international markets (ex-China) from ~34% to ~45% would imply ~65M new Prime Members,” Anmuth said.

Amazon’s broader ecosystem is also seen as a growth lever. The report highlighted over 6 million Amazon Business customers, 200 million monthly Prime Video users, and 600 million Alexa-enabled devices. These, alongside 250 million Fire TV devices sold, offer more entry points to drive Prime adoption.

Logistics investments remain key to enhancing Prime’s value. Amazon delivered more than 9 billion Same-Day or Next-Day units in 2024, with a new record set in Q1 2025.

JPMorgan said these faster delivery times are increasing purchase frequency and deepening engagement across the platform.

Benchmark hikes Tesla PT to $475 after successful Robotaxi launch

Meanwhile, Benchmark raised its price target on Tesla (NASDAQ:TSLA) to $475 from $350 after the company launched its robotaxi service in Austin, calling the move a step toward winning public and regulatory trust.

Analyst Mickey Legg described the limited rollout as a “controlled and safety-first approach,” with upcoming Texas regulations likely to aid wider deployment.

Tesla shares have surged sharply from April lows but still trade about 33% below their December peak.

Despite near-term delivery softness, Legg reaffirmed the stock as a top pick for 2025. “We are returning to our initial price target of $475 and believe our thesis remains intact,” he said.

While Alphabet’s Waymo leads in autonomous ride-hailing, Legg argues Tesla’s strategy is more scalable and cost-efficient. “We are a believer in TSLA’s camera-focused approach that is not only cost effective but also scalable,” he noted, citing the lower cost of Tesla’s Model Y fleet.

He sees future growth driven by the robotaxi buildout, upcoming product refreshes, and Tesla’s push into robotics.

“In our view the company is undergoing an evolution from a trailblazing vehicle OEM to a high-tech automation and robotics company,” the analyst wrote.

Broadcom upgraded to Buy at HSBC on ASIC potential

Earlier this week, HSBC upgraded Broadcom (NASDAQ:AVGO) to Buy from Hold and raised its price target to $400 from $240, citing stronger visibility into its ASIC pipeline and diminishing risks tied to wireless and VMware segments.

The new target implies roughly 48% upside from Friday’s close.

The bank now expects Broadcom’s ASIC revenue to reach $28.4 billion in FY26 and $42.8 billion in FY27, which is 42% and 69% above consensus, respectively.

“We now believe its ASIC revenues will significantly beat market expectations from better ASIC project visibility as well as average selling price (ASP) pricing power,” said analyst Frank Lee.

Improved confidence in Broadcom’s wireless outlook also played a role in the upgrade. HSBC forecasts that 88% of Apple (NASDAQ:AAPL) products will still use Broadcom parts in FY26, easing concerns over Apple’s potential in-sourcing. Wireless revenue projections were revised upward accordingly.

At the same time, VMware headwinds are seen as overstated, with customer migration to subscription plans likely to support steady growth through FY26.

“Broadcom continues to move VMware customers to subscription models for another 18 months at least so we do not expect any imminent slowdown,” Lee noted.

HSBC applies a 32x FY27 price-to-earnings (P/E) multiple to value the stock, reflecting a 10% premium to Broadcom’s recent highs. “The ASIC revenue opportunity can drive upside and help re-rate the stock towards a new peak P/E,” the report said.

Driving the bullish outlook is surging demand from hyperscalers for custom silicon, which is lifting both ASPs and unit growth. HSBC projects ASIC blended ASPs to rise 92% in FY26 and 25% in FY27, supported by larger die sizes and next-generation memory.

The bank expects Broadcom to have up to seven ASIC customers by FY27, compared to three for Marvell (NASDAQ:MRVL) and one for Alchip.

AMD lifted to Buy as stock ’has a lot more to go’: Melius

Melius Research lifted its rating on Advanced Micro Devices (NASDAQ:AMD) shares to Buy from Hold and hiked its price target to $175 from $110, citing stronger momentum in the AI inferencing market.

The analysts, led by Ben Reitzes, argue that AMD stock “has a lot more to go,” pointing to several positive developments that have emerged since the start of the year.

The brokerage believes investors are “in the middle of another move to the upside,” backed by growing demand for AMD’s MI300 and MI350 GPUs and early traction with the upcoming MI400 platform.

Interest from hyperscalers and sovereigns has increased, supported by AMD’s improvements in memory bandwidth and software.

Melius also noted improving conditions in the PC market, with higher ASPs and share gains from Intel (NASDAQ:INTC) helping offset potential pressure from Nvidia’s expected entry into the CPU space. The report highlights new partnerships with Amazon, OpenAI, Meta (NASDAQ:META), and Saudi Arabia’s HUMAIN as signs of expanding customer reach.

“These partnerships point toward AMD’s share in the Middle East potentially being higher than its global share,” the analysts wrote, estimating that “each gigawatt is worth multiple billions in opportunity for AMD, even if Nvidia (NASDAQ:NVDA) gets the vast majority of the share.”

Beyond GPUs, the firm expects continued progress in server CPUs, driven by the new “Venice” chip and “Helios” rack-scale platform.

EPS estimates were raised sharply through 2027, with potential for further upside if AMD exceeds 5% share in the accelerator market.

“If things break right, we could see a few billion of upside to GPU sales by 2027, driving over $1.00 in upside to our EPS estimate of $7.08,” the note said.