Top Analyst Moves in AI Stocks: Winners, Warnings, and What to Watch

Nvidia leads the charge while Adobe, Cisco take a hit – What does it mean for investors in AI and tech stocks?

Analysts Make Big Calls on Key AI-Related Stocks

Artificial intelligence (AI) remains one of the most dynamic areas in global tech markets. This week, analysts have made bold moves on major tech names, from raising Nvidia's price target to downgrading Adobe and Cisco due to growing market pressures.

Below, we break down the five biggest analyst actions and what they could mean for investors navigating the fast-moving AI landscape.

Nvidia Target Raised as AI Demand Stays Strong

Piper Sandler increased its price target on Nvidia (NASDAQ: NVDA) from $180 to $225, ahead of the company’s next earnings announcement. The upgrade was based on:

• Continued demand from US cloud providers (hyperscalers)
• Renewed revenue from China, following a US administration agreement allowing certain chip exports
• Projected revenue of $45.1 billion for the July quarter
• Estimated China sales of $5.5–6.5 billion in the October quarter

Despite a possible 15% margin cut on China sales, Nvidia’s gross margins are expected to remain healthy.

Apple Forecast Brightens as iPhone Demand Rebounds

Morgan Stanley is becoming more bullish on Apple (NASDAQ: AAPL), citing stronger-than-expected iPhone sales and a production uptick for the iPhone 16 and Pro Max.

Key highlights:

• iPhone 16 build forecast increased to 54 million units for Q3
• Potential shipments for Q4 could hit 84 million
• The bank reaffirmed its Overweight rating with a $240 target

Apple’s gross margin tailwinds, pent-up demand, and easing regulatory pressures are encouraging signs. Analysts say Apple could surge with just one high-profile AI partnership.

Adobe Downgraded: “AI is Eating Software”

Melius Research cut Adobe (NASDAQ: ADBE) to a Sell rating, warning that AI disruption is eroding traditional software business models.

Concerns include:

• Falling stock prices across major SaaS players
• Threats from AI-first competitors like Canva and Runway
• Limited monetisation of Firefly (Adobe’s AI creative tool)
• Revised revenue forecasts: just 4–7% growth expected by 2027

Melius believes Adobe could lose further value as demand shifts toward infrastructure-focused firms like Microsoft and Oracle.

Cisco Downgraded as Growth Slows

HSBC downgraded Cisco (NASDAQ: CSCO) to Hold, citing a decline in momentum and overstretched valuation.

Key points:

• EPS estimates for 2026–2028 cut by up to 14%
• Slowing performance obligations and backlog raise concerns
• AI infrastructure orders strong, but offset by weaknesses elsewhere

Cisco's acquisition of Splunk may not be enough to reignite long-term growth, according to analysts.

Foxconn Upgraded on AI Server Surge

Morgan Stanley raised its target for Foxconn (TW: 2354) from NT$220 to NT$250, citing:

• 300% quarter-on-quarter growth in AI server rack shipments
• Stronger margins than expected
• Expanded US operations with over $1.5 billion invested in AI-related facilities

Foxconn is forecast to derive over 50% of its revenue from cloud and networking by 2026.

Conclusion: Navigating the AI Market – Who Stands to Win?

This week’s analyst actions reveal a clear trend: AI is reshaping the tech sector, creating winners and losers. Nvidia and Foxconn are seen as strong growth bets, while Adobe and Cisco face pressure from leaner, AI-native competition.

For investors, this signals a shift:

• Favour companies with infrastructure and AI scale (like Nvidia, Apple, and Foxconn)
• Be cautious with legacy software firms under threat from rapid AI innovation
• Watch for partnerships and government policy shifts, especially with chipmakers

The AI revolution is here. Picking the right tech stocks now could define investment success for the next decade.

Sources: (Investing.com, Reuters.com)