Investing.com — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week. <\/p>\n
HSBC upgrades Apple to Buy as company reaches “operational turning point” <\/p>\n
HSBC has upgraded Apple (NASDAQ:AAPL) to Buy from Hold, raising its price target to $366 from $260, saying the iPhone maker is at “an operational turning point” as AI capabilities and a strong product pipeline support growth. <\/p>\n
Analyst Nicolas Cote-Colisson said the bank had previously preferred other parts of the AI value chain such as hyperscalers and memory makers, but now believes Apple “is well placed to leverage its 2.5bn installed device base with its forthcoming revamped Apple Intelligence.” He highlighted that Apple invests just 2.5% of its 2026 estimated sales in capex, compared with 39% for hyperscalers. <\/p>\n
A key catalyst is the deployment of Apple’s new agentic Siri this year, featuring visual intelligence and context-aware conversations across apps, relying on foundation models distilled from Gemini that run on-device and on Apple’s private cloud servers. <\/p>\n
Cote-Colisson also cited a strong hardware pipeline, including the iPhone 18 Pro and Pro Max this fall, an iPhone Air in April 2027, a book-style foldable phone, and a 20th-anniversary special edition iPhone alongside smart glasses in 2027. <\/p>\n
HSBC raised its 2027-28 group revenue forecasts by 7-9%, including iPhone sales estimates of 11-13%, and increased its 2027 Services revenue estimate by 5.4%. <\/p>\n
Piper Sandler starts SpaceX at Neutral amid near-term headwinds <\/p>\n
Earlier this week, Piper Sandler initiated coverage of SpaceX (NASDAQ:SPCX) at Neutral with a $156 price target, citing idiosyncratic near-term headwinds despite a constructive multi-year view. <\/p>\n
Analyst Alexander Potter said the brokerage is “comfortable underwriting the multi-year thesis” for SpaceX after covering Tesla (NASDAQ:TSLA) for more than a decade, but is initiating at Neutral “because there are some idiosyncratic near-term headwinds that we think will likely cap upside”, including staged lockup expirations and uncertainty around a potential Tesla acquisition. <\/p>\n
The analyst added it will take time before the market is convinced SpaceX can deliver on its approach to launching orbital AI datacenters, while capex will “easily consume 10s (if not 100s) of billions of USD annually” in the meantime. <\/p>\n
While Potter views SpaceX and Rocket Lab (NASDAQ:RKLB)as “probably best-positioned over a multi-year period” given the difficulty of building reusable rockets and the cost advantages of vertical integration, he said it’s “hard to argue that SPCX and RKLB are ‘cheap'” over a one-year horizon. <\/p>\n
Instead, it prefers Ast Spacemobile (NASDAQ:ASTS), also initiated Thursday, due to a more palatable valuation and clearer path to EBITDA upside. <\/p>\n
BofA names Micron top pick as memory shifts from commodity to AI enabler <\/p>\n
Bank of America has named Micron (NASDAQ:MU) its top stock pick, arguing that memory has become a structural and durable investment trend while the sector continues to trade at below-average valuations. <\/p>\n
The bank notes that memory now represents approximately 35-40% of cloud AI capital expenditures, 2-3 times higher than historical levels, yet memory stocks continue to trade at around 10 times forward price-to-earnings. BofA reiterated a Buy on Micron with a $1,550 price target, arguing investors are underestimating the industry’s transition toward longer-duration agreements and more predictable pricing structures. <\/p>\n
The valuation uses a sum-of-parts approach, assigning $1,040 per share to Micron’s traditional cyclical memory business at 3 times 2028E price-to-book, toward the high end of its long-term range, with the AI HBM business valued at 31 times 2028E earnings, in line with the AI compute peer group median. <\/p>\n
As memory evolves from cyclical commodity to strategic AI enabler, BofA believes valuation multiples should expand. <\/p>\n
The bank acknowledged downside risks including larger-than-expected memory average selling price (ASP) declines, greater competition from Chinese newcomers, potential share loss to larger competitors, and softening demand across data centers, smartphones, or PCs. <\/p>\n
Broadcom remains one of preferred AI names, behind Nvidia: Morgan Stanley <\/p>\n
Morgan Stanley has reiterated its Overweight rating on Broadcom (NASDAQ:AVGO), pushing back on investor concerns that MediaTek (TW:2454) could significantly erode the company’s share of Google’s TPU business. <\/p>\n
Analyst Joseph Moore said Morgan Stanley expects Broadcom to retain roughly 80% TPU share over time, calling bearish forecasts of 50% share or eventual displacement “premature.” He said “MediaTek participation is real, but not disruptive,” comparing the debate to last year’s Marvell\/Alchip dynamic on Amazon’s Trainium chip, where fears of full displacement also proved overstated. <\/p>\n
While acknowledging MediaTek has a credible opportunity given Google’s cost consciousness and desire for supplier optionality, Moore believes potential cost savings could be difficult to realize, particularly around HBM memory, where Broadcom has already secured supply under existing contracts. <\/p>\n
He also flagged execution risk around MediaTek’s packaging strategy, noting it still expects MediaTek to rely on CoWoS capacity for 2nm TPU production, with EMIB packaging remaining unproven at the scale Google requires. <\/p>\n
Morgan Stanley estimates Broadcom will generate roughly $120 billion in AI revenue in fiscal 2027, with TPU-related revenue around $80 billion, though TPU’s share of total AI revenue is expected to decline to about 60% as newer ASIC customers ramp. <\/p>\n
“AVGO remains one of our preferred AI compute names and a close #2 behind NVIDIA,” Moore said, describing Broadcom as “one of the best growth stories in semis, supported by its leadership in custom ASICs, strong networking franchise, increasing AI revenue diversification, and a management team we trust to execute through product transitions.” <\/p>\n
While the MediaTek debate represents “a real overhang,” the analyst said he thinks “the market is overstating the risk to Broadcom’s growth trajectory.” <\/p>\n
SK Hynix’s US shares could more than double, Barclays says <\/p>\n
Barclays has initiated coverage of SK Hynix’s (NASDAQ:SKHY) newly-listed American Depositary Receipts (ADRs) with an Overweight rating and a $330 price target, implying upside of nearly 115%, arguing that industry supply tightness is set to worsen in 2027 with only limited improvement in 2028. <\/p>\n
The bank’s global DRAM model shows bit supply growing 20% year-over-year in 2027, failing to keep pace with bit demand growth it expects to accelerate to 35%, resulting in “continued tightness for a number of years yet.” Analyst Simon Coles said this underpins “further significant growth from here.” <\/p>\n
Following a week of U.S. investor meetings, Coles said the central debate remains “whether this time is different,” with investors largely unconvinced. Skepticism centered on whether long-term agreements would protect pricing in a severe downturn, and on how memory stocks trading at mid-single-digit P\/E ratios can be reconciled with semiconductor capital equipment names trading at 30-40x. <\/p>\n
Coles said he views memory as “too cheap, but they are related” to the equipment names. <\/p>\n
On China, Coles acknowledged rapid progress in DRAM and NAND, with the top Chinese player’s DDR5 yield improving to more than 75% by end-2025 and bit shipments estimated to grow 55% year-over-year in 2025 and 48% in 2026. <\/p>\n
Even so, he estimates any Chinese share gains outside China would free up only 1-4% of combined capacity at Samsung, SK Hynix and Micron, seeing “limited impact on the global DRAM market landscape for now.” He also noted the top Chinese player’s HBM3 development remains delayed, with mass production likely pushed to 2027. <\/p>\n
For SK Hynix specifically, Coles expects the company to retain its HBM lead with a 50%-plus share for years, and flagged a shift in the investment case toward capital returns, estimating SK Hynix will hold cash equivalent to more than 40% of its current market cap by end-2027, providing “ample opportunity to boost earnings growth through share buybacks.” <\/p>\n
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