Investing.com — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
UBS reinstates as top European semi pick, raises price target
UBS has reinstated ASML as its top pick in the European semiconductor sector, raising its price target to €1,900 from €1,600 and lifting its 2027 and 2028 earnings estimates well above consensus.
The stock has lagged peers noticeably this year, and UBS sees that underperformance as an opportunity. The bank highlighted that ASML now trades at just a 6% premium to U.S. large-cap peers on a 12-month forward P/E basis, against a 10-year average premium of 84%.
ASML has the “most attractive risk/reward in the sector,” analysts led by Francois-Xavier Bouvignies wrote.
The bullish case rests on three drivers. First, UBS pushes back against market fears that ASML could become a bottleneck constraining semiconductor supply, arguing those concerns are overstated.
The bank estimates ASML’s 2027 capacity can support more than 50% year-on-year growth in leading-edge wafer output, well ahead of projected demand growth of around 25-30%.
“While productivity gains may modestly dilute litho intensity as other process steps struggle to keep pace, we do not expect ASML to act as a bottleneck in the next 12/18 months,” the analysts wrote.
Second, UBS sees ASML’s memory exposure as a key underappreciated driver. The company is “the most memory-exposed semi-cap name,” with roughly 30-35% of revenues tied to memory by 2026 versus 25-30% for U.S. peers.
That has already translated into stronger growth: a 23% memory revenue CAGR between 2020 and 2025 versus around 6% for peers, and UBS expects the trend to continue as DRAM node shrinks drive increased lithography intensity through 2028.
Third, UBS argues the case for High NA EUV, ASML’s next-generation lithography technology, remains intact despite some delays in TSMC adoption. The bank estimates High NA can deliver cost savings of 20-40% on critical layers versus alternative patterning approaches, with adoption seen coming within two to three years.
“We see ASML as one name still offering attractive risk/reward in Europe semis, and we reinstate it as our top sector pick,” the analysts said.
flagged as top pick at Evercore ahead of earnings
Evercore ISI said hardware and networking stocks are well-positioned heading into earnings, with Dell its top pick, arguing that resilient demand and higher average selling prices (ASPs) are likely to drive upside across its coverage.
In a note previewing April-quarter results from Dell, HP Inc., Hewlett Packard Enterprise and NetApp, the broker said it believes “AI infrastructure and networking demand remain among the most durable areas of spend,” supported by higher hyperscaler and neocloud capex alongside continued enterprise investment in campus networking and data center modernization.
Evercore ISI sees Dell and HPE as “well positioned to report upside and raise their full-year guidance.” For Dell, it cited potential upside to AI server revenues from incremental neocloud and enterprise AI spending. For HPE, networking upside across Aruba and Juniper was flagged as a key driver.
On personal computers, near-term trends remain positive, with IDC reporting approximately 3% year-on-year shipment growth, while higher average selling prices are seen as an additional tailwind.
BofA reinstates at Underperform on structural AI-driven reset
Bank of America has reinstated coverage of Salesforce with an Underperform rating and a $160 price target, arguing the company faces a structural reset driven by AI rather than a temporary cyclical setback.
Analyst Tal Liani said he views Salesforce as “transforming from a historically high growth platform to a mature cash generator,” modeling revenue growth of roughly 10% annually going forward — a marked deceleration from the 18-28% rates achieved from FY20 to FY23.
The thesis rests on three structural concerns: limited net new customer additions, weakening upsell dynamics, and an underwhelming monetization pathway for Agentforce, its AI product.
On Agentforce, Liani acknowledged headline metrics of 23,000 customers and $800 million in annual recurring revenue (ARR) growing 169% year-over-year, but argued the product’s reach remains narrow. Only 9-10% of Salesforce’s 200,000-plus customers have signed paid deals, and more than 60% of bookings came from existing customers rather than new logos.
He also flagged a structural tension: as Agentforce automates tasks like lead qualification and service case resolution, it reduces the number of human users requiring Salesforce subscriptions, pressuring the seat-based model that has historically driven growth.
“We view CRM evolving into a saturated mission-critical system of record, rather than a platform capable of incremental growth monetization,” Liani said.
On competition, the analyst pointed to encroachment from multiple directions — ServiceNow expanding into CRM-adjacent workflows, Google deploying agent-based orchestration platforms above the application layer, Adobe competing in marketing, and Shopify in commerce.
“While these players often target different subsegments, the net effect is greater overlap, and potential pressure on growth and pricing power,” he wrote.
BofA does not expect Salesforce’s existing customer base to abandon the platform, but Liani argued that entrenchment alone is insufficient. “Enterprise entrenchment is not a growth strategy,” he said, noting that with approximately 90% of the Fortune 500 already on Salesforce, the addressable market for new wins is increasingly limited.
Jefferies downgrades ZoomInfo to Hold as AI disruption forces business model shift
This week, Jefferies downgraded ZoomInfo to Hold from Buy, cutting its price target to $4 from $12, as the company pivots away from subscription revenues toward a usage-based model under pressure from weakening client demand and AI-driven disruption.
Analyst Surinder Thind now projects revenue declining 4% in 2026 and a further 3% in 2027, a sharp reversal from prior expectations of low-single-digit growth. The key driver is a shift in client behavior, with customers increasingly choosing to build their own workflows around ZoomInfo’s data rather than paying for software on a seat-license basis.
“AI is proving to be much more disruptive than initially expected,” Thind wrote. ZoomInfo has lowered its 2026 revenue outlook to a midpoint of roughly $1.195 billion, well below prior guidance of $1.247–$1.267 billion and consensus of $1.259 billion.
Management has outlined a three-part restructuring: transitioning clients to consumption-based pricing with a hybrid model rolling out in the third quarter, shifting to an almost exclusively product-led go-to-market motion to reduce reliance on costlier sales-led processes, and cutting its workforce by 20%, or around 600 employees.
Thind acknowledged the downgrade was late relative to the stock’s roughly 64% decline this year, but said he saw no near-term catalyst. “Until we have better visibility on the transition and its likelihood of succeeding, our preference is to move to the sidelines and take a wait-and-see approach,” he wrote.
Morgan Stanley ups target, calls it top pick for AI data center networking exposure
Morgan Stanley has raised its price target on Nokia to €14 from €11, reiterating the stock as its top pick and arguing the company is uniquely positioned to benefit from surging data center spending driven by AI and cloud expansion.
The bank sees Nokia’s transformation from a traditional mobile technology company into a supplier of data center optical networking equipment as the central driver of a stock re-rating. Its AI and cloud revenues stood at just €1.1 billion in 2025, well below peers, a gap Morgan Stanley views as an opportunity rather than a weakness.
“Potential new orders can have an outsized effect on the absolute revenue figure and the rate of change can be significant, especially when starting off a low base,” analysts led by Terence Tsui wrote.
A key catalyst has been the revenue guidance upgrade in Nokia’s optical and IP networks unit to 18-20% from 10-12%. Morgan Stanley’s own forecasts sit above even that range, at 21% growth, with 2028 operating profit seen at €3.65 billion versus the top end of company guidance at €3.2 billion.
The bank also highlighted Nokia’s scarcity value. “The AI story in Europe has largely evolved around compute, energy and electrical components with few companies involved directly in connectivity/networking,” the analysts noted, adding that Nokia’s position as a Western supplier of critical infrastructure has drawn significant investor attention.