Investing.com — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
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2025 could be peak for Nvidia stock: D.A. Davidson
In a Thursday note, D.A. Davidson analysts suggested that 2025 could be the peak year for Nvidia (NASDAQ:NVDA) stock, maintaining a cautious view on the company’s long-term outlook.
Despite Nvidia’s strong performance over the past year, the firm raised questions about its ability to meet 2026 expectations, describing its forecast for that year as “street low.”
D.A. Davidson initiated coverage of Nvidia in January 2024 with a Neutral rating, flagging significant concerns that positioned the firm among the most conservative voices on Nvidia’s future prospects. This cautious stance remains unchanged, with the firm reiterating its Neutral rating and a $135 price target, reflecting a 35x multiple.
“We remain cautious on NVDA’s ability to meet consensus expectations for CY2026 and beyond,” the firm’s analysts stated, stressing that while 2025 may represent a high point, sustaining growth beyond that could prove challenging.
Among the firm’s key concerns are supply-side disruptions, including restrictions on sales to China and quality issues with Nvidia’s Blackwell products. However, D.A. Davidson noted that these challenges could “actually prolong the cycle,” as supply constraints may help maintain demand in the near term.
Still, D.A. Davidson anticipates a potential slowdown in 2026.
“Shorter-term, we expect investors to focus on the supply-side disruptions, namely limits on sales to China as well as Blackwell quality issues,” the firm commented, adding that the “longer-term driver will remain demand.”
Morgan Stanley sets Tesla bull case at $800
Earlier in the week, Morgan Stanley (NYSE:MS) raised its price target for Tesla Inc (NASDAQ:TSLA) shares to $430 from $400, with a new bull case valuation of $800.
The Wall Street firm attributes the upgrade to Tesla’s advancements in autonomous vehicle (AV) technology and its integration of embodied AI, which are viewed as critical drivers of future growth.
The report highlights Tesla’s unique expertise in data collection, robotics, energy storage, and AI infrastructure, positioning the company as a leader in the autonomous mobility market.
Tesla Mobility, the company’s autonomous rideshare division, is valued at $90 per share in the updated sum-of-the-parts (SOTP) model. The division’s fleet is projected to expand to 7.5 million vehicles by 2040, generating $1.46 per mile in revenue with a 29% EBITDA margin.
Morgan Stanley also underscores the growing importance of Tesla’s Network Services, which include recurring revenue streams such as Full Self-Driving (FSD), supercharging, and software updates.
This segment is expected to account for one-third of Tesla’s total EBITDA by 2030, increasing to nearly 60% by 2040. The Network Services division is now valued at $168 per share, reflecting its rising significance within Tesla’s overall business model.
“We raise our price target to $430 from $400 previously, driven by increases in our Mobility and Network Services valuations and partially offset by a decrease in our 3rd Party Battery business valuation,” analysts led by Adam Jonas wrote.
The bank notes that Tesla’s potential in embodied AI extends beyond vehicles to areas like aviation and marine, though these opportunities are not yet included in the valuation. Analysts expect Tesla’s unsupervised autonomous vehicle fleet to launch in a city setting by 2026 but do not expect widespread deployment until after 2030.
While the incoming administration may reevaluate self-driving policies at a national level, Tesla still faces “significant hurdles” in technology, testing, and permitting for near-term commercialization, the analysts added.
Morgan Stanley’s bull case assumes a fleet size of 12 million vehicles by 2040, generating $1.50 per mile in revenue with a 45% EBITDA margin, driven by international expansion and enhanced pricing power.
On the other hand, the bear case valuation of $200 per share reflects challenges such as stricter regulations and slower geographic adoption.
AMD downgraded at Wolfe Research
Wolfe Research has downgraded Advanced Micro Devices Inc (NASDAQ:AMD) stock to Peer Perform from Outperform, pointing to reduced expectations for the company’s data center GPU revenue in 2025.
Analysts now predict $7 billion in revenue for the segment, a sharp decline from the earlier estimate of over $10 billion.
“We now expect $7bn in DC GPU revenue for CY25 vs. our prior expectation of $10bn+,” Wolfe Research wrote in a note. They also believe that AMD will refrain from offering guidance for this segment during its upcoming fourth-quarter earnings call.
The downgrade follows visits to Asia, where ODM build plans suggested only modest growth for AMD.
“We estimate datacenter GPU revenue in the $1.5-2.0bn range for 4Q and $7bn for CY25,” Wolfe analysts added, emphasizing that these figures are well below buy-side expectations of roughly $10 billion.
Challenges extend to other parts of AMD’s business as well. Analysts foresee a 17% sequential decline in the client segment for Q1 2025 due to weak PC demand, a 20% drop in gaming revenue, and no immediate recovery in the embedded segment, which might improve later in the year.
In light of these adjustments, Wolfe Research has reduced its 2025 forecasts for AMD’s total revenue and earnings to $29.9 billion and $4.19 per share, down from prior estimates of $33.6 billion and $5.33 per share.
On a more positive note, Wolfe Research expressed some optimism for AMD’s upcoming MI350 series, slated for release in the second half of 2025.
TD Cowen lifts SAP stock to Buy
TD Cowen has upgraded SAP SE ADR (NYSE:SAP) shares to Buy from Hold, raising its price target to $305 from $240.
The upgrade is underpinned by survey data showing a significant rise in the prioritization of Cloud enterprise resource planning (ERP), with AI emerging as a key driver of ERP migration.
“The growth acceleration + margin expansion combo is poised to persist through ’27 & put further upward pressure on valuation,” analysts led by Derrick Wood wrote in a Thursday note.
TD Cowen’s 2025 Software (ETR:SOWGn) Spending Survey revealed ERP climbed to third place out of 11 categories in SaaS spend priorities, up four spots from its previous ranking. Additionally, quarterly surveys of SAP partners in Q4 indicated improved performance and a stronger growth outlook for 2025, with expectations rising to +7%, compared to +2% at the same time last year.
The firm highlights robust Cloud ERP demand, which showed resilience in 2024 and is expected to accelerate over the next three years. This growth is driven by factors such as 2-3 times revenue conversion on cloud migrations, the 2027 end-of-life for SAP’s legacy ECC product, and higher attach rates for adjacent products.
The company is also anticipated to benefit from reduced drags from IaaS and transactional products, along with an average selling price (ASP) boost from new AI and data offerings.
According to TD Cowen, SAP stands to leverage AI in two major ways: as a catalyst for accelerating Cloud ERP migrations and through monetizing GenAI features in its Premium SKU, which offers a roughly 30% price uplift.
For the upcoming Q4 earnings report on January 28, TD Cowen expects SAP to achieve another five-year high in Cloud growth.
TD Cowen analysts model Cloud growth accelerating nearly 200 basis points to approximately 29% at constant currency (cc), above Street expectations of around 28% cc. Furthermore, the recent strength of the US dollar is projected to provide a tailwind, leading TD Cowen to raise its FY25 estimates.
The combination of accelerating growth and expanding margins is expected to continue driving upward momentum in SAP’s valuation, analysts said.
Snowflake top pick at Oppenheimer for 2025
Oppenheimer analysts have reaffirmed Snowflake Inc (NYSE:SNOW) as a top pick for 2025, citing strong expectations for the company’s performance and strategic growth initiatives. The firm also raised its price target for the stock to $200 from $180.
The positive view is based on several key factors that position Snowflake for potential outperformance.
First, Oppenheimer points to a favorable setup for FY26, with an initial guidance aligned with consensus that could offer slight upside.
The analysts expect a “beat-and-raise cadence” throughout the year, driven by the launch of new products and increased AI workloads. Innovations such as Snowpark, Dynamic Tables, and Cortex are projected to drive higher consumption and accelerate revenue growth.
The investment bank also points out a shift in its perspective regarding Iceberg. While concerns about lost storage revenue in FY25 initially clouded expectations, Oppenheimer now sees Iceberg as a growth catalyst for FY26. Analysts believe it will play a significant role in boosting consumption and strengthening Snowflake’s revenue streams.
Momentum in Cortex and AI is another critical driver, according to the note. As cloud and large language model (LLM) independence gain traction, customers are increasingly incentivized to build applications on Snowflake’s platform, leveraging its advanced capabilities for handling AI workloads.
Finally, Oppenheimer anticipates operating margin expansion as investment levels normalize after a period of increased spending in FY25, creating opportunities for improved profitability.
“Net, we see good support for improving consumption with room for upside from new products, expanding AI use, and better margins,” the analysts concluded.
