Investing.com — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
Micron to report ’another strong quarter’, Goldman says
Goldman Sachs has sharply raised its price target on Micron to $900 from $400, lifting revenue and adjusted earnings per share (EPS) estimates by 28% and 36% on average for 2026 and 2027, ahead of the company’s fiscal third-quarter results later this month. The bank maintained its Neutral rating.
Analysts led by James Schneider expect Micron to deliver roughly 9% upside to Street revenue in the quarter, forecasting revenue, gross margin and EPS of $37.6 billion, 83.4% and $22.07, respectively, against consensus of $34.4 billion, 81.9% and $19.74.
For the August quarter, Goldman projects revenue of $48.8 billion versus consensus of $40.4 billion, with full-year 2026 revenue and EPS estimates sitting 30% and 36% above the Street.
The primary driver is ongoing market tightness. “We expect tight conditions to persist throughout CY27 and to result in increased pricing and margins for the industry,” the analysts wrote, with supply and demand conditions expected to remain tight throughout 2027.
Goldman expects investor attention to focus on Micron’s Strategic Customer Agreements (SCAs) — long-term contracts that lock in supply commitments and potentially include pricing guarantees.
“We believe investor positioning remains very bullish given the dramatic share price run-up and optimism around the potential impact of long-term customer agreements,” the analysts said.
They also noted investors expect Micron to maintain or expand its roughly 20% share in high-bandwidth memory, with conventional DRAM pricing providing additional upside.
Wolfe Research initiates SpaceX at Buy, flags “ocean of opportunity”
Wolfe Research earlier this week initiated coverage of Elon Musk’s Space Exploration Technologies with an Outperform rating and a $175 price target.
The move came ahead of the company’s Nasdaq debut after pricing the largest-ever U.S. IPO at $135 a share. The offering raised a record $75 billion, valuing the rocket, satellite and AI company at $1.77 trillion.
Analysts Myles Walton and Peter Supino argued that SpaceX’s push toward near-zero launch costs creates a competitive position few rivals can credibly challenge, projecting 70% top-line growth and a near-doubling of EBITDA margins through 2030.
“SpaceX turned a competitive moat into an ocean of opportunity that we don’t see others crossing,” they wrote.
The bull case rests heavily on Starship, the next-generation fully reusable rocket still in testing. Wolfe estimates successful reusability would cut incremental launch costs from roughly $14 million per Falcon 9 flight to under $5 million for Starship, with minimum costs approaching $1 million in fuel.
Without Starship, Wolfe sees 2030 and 2035 financial targets cut by 35% and 50%, respectively.
Starlink is modeled as the most reliable near-term earnings engine, with Wolfe projecting Connectivity EBITDA exceeding $90 billion by 2030 as next-generation satellites expand broadband and mobile subscriber bases.
The AI segment, boosted by SpaceX’s acquisition of xAI and a pending deal for coding platform Cursor, is seen as the fastest-growing part of the business, anchored by compute contracts with Anthropic and Google worth $26.4 billion annually.
The analysts flagged meaningful risks, however. Starship has yet to achieve orbital flight, and Musk’s history of ambitious timelines warrants caution. “Investors should be eyes-wide-open as to the lack of realism in many of the targets,” they said.
The team also noted that they “don’t expect SpaceX to out-innovate Anthropic or OpenAI on the model side, but we expect SpaceX to build a cost advantage into the compute end game through verticalization and space access; but that will be moot if we are all in an AI bubble.”
BofA double-upgrades Intel to Buy on server CPU and foundry opportunity
Bank of America has double-upgraded Intel from Underperform to Buy and lifted its price target to $135 from $96, driven by growing confidence in the company’s server CPU opportunity and its external foundry business.
The move reflects a significant reassessment of earnings potential. BofA now sees Intel delivering earnings power of more than $6 per share by 2030, up from a prior estimate of $3-4, applying a 25x multiple to its 2030 EPS power estimate of $6.24 discounted back two years.
Analysts led by Vivek Arya said the previous sum-of-parts methodology “under-represents many of the company’s CPU and foundry potentials that are further out.”
On server CPUs, BofA expects sales to reach more than $40 billion by 2030, representing roughly 25% of a $170 billion total addressable market. The analysts frame the opportunity through the lens of agentic AI, arguing that as AI workloads evolve, the CPU’s role is structurally expanding — from traditional server management to orchestrating autonomous AI agents, a category valued at around $70 billion by 2030.
For the foundry business, BofA identified several potential deals in Intel’s pipeline, including Apple M-Series wafers, MediaTek TPU wafers, and ARM-based server CPU opportunities, with a recent IP collaboration with Cadence on Intel’s 14A node seen as helping build a more sustainable external foundry ecosystem.
The analysts also flagged Intel’s unusually low institutional ownership as a potential catalyst. Despite a market cap of around $540 billion — fifth largest among U.S. semiconductor and AI infrastructure stocks — Intel is owned by just 16% of S&P 500 funds, making it the second least-owned stock in the group after SanDisk.
BofA upgrades STMicroelectronics, sets Street-high price target
In a separate notable move, Bank of America has upgraded STMicroelectronics to Buy from Neutral, setting a Street-high price target of €86/$100, arguing the market is materially underestimating the chipmaker’s earnings power over the next two to three years.
Analysts led by Didier Scemama cited four key drivers: a growing position in optical interconnects for data centers, exposure to the low-earth orbit satellite market, a nascent recovery in automotive and industrial demand, and “substantial operating leverage owing to its considerable spare capacity.”
The team models EPS of $1.57, $3.53, and $4.63 for 2026, 2027, and 2028 respectively, 30% to 43% above consensus across the three years.
Optical interconnects are central to the bull case, with BofA forecasting revenues growing from $670 million this year to $2.3 billion by 2028, underpinned by STM’s 300mm silicon photonics manufacturing and advanced packaging capabilities.
The bank sees STM’s market share in silicon photonics expanding from around 5% currently to more than 30% over the next three years, with AWS as the anchor customer.
Moreover, in LEO satellites, where STM holds roughly 90% market share, BofA forecasts cumulative revenues of $3.6 billion between 2026 and 2028, ahead of company guidance of $3 billion or more.
“STM is currently trading at a 32% discount to diversified peers on 2028E EV/EBITDA; we do not believe such a deep discount is justified,” the analysts said.
Wall Street downgrades Adobe on freemium pivot and leadership uncertainty
Adobe shares came under fresh pressure Friday after quarterly results prompted a wave of downgrades, with analysts citing a strategic pivot toward freemium growth and continued leadership turmoil.
Wolfe Research downgraded to Peer Perform from Outperform, with analyst Alex Zukin calling the quarter “thesis-changing.” Net new annual recurring revenue (NNARR) excluding Semrush came in at $560 million, down 3% year-over-year, while organic ARR growth guidance was cut by roughly $480 million.
Wolfe set a fair value range of $165-$210, noting that while AI ARR tripled year-over-year, “total NNARR still declined Y/Y, making it harder to underwrite durable ARR growth.”
Evercore ISI moved to In Line from Outperform, cutting its price target to $225. Analyst Kirk Materne said Adobe reset its full-year organic ARR outlook by approximately $500 million, with the headline 10.2% total ARR growth target now incorporating roughly $480 million of Semrush ARR.
Materne said he was “wrong to assume that a washed-out valuation could bridge investors to a narrative reset,” and doesn’t expect sentiment to improve until a new CEO and CFO are in place and demonstrate execution.
Stifel also downgraded the stock to Hold from Buy, with analyst J. Parker Lane noting the company “meaningfully lowered its F2H organic ARR outlook” while trading near-term growth for monthly active user growth.
The downgrade also reflects the announced departure of CFO Dan Durn, compounding uncertainty already created by CEO Shantanu Narayen’s planned exit later this year.
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