Questions on Nvidia speed; AMD downgraded by Investing.com

Investing.com – Here are the biggest analyst moves in the artificial intelligence (AI) space this week.

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2025 could be high for Nvidia stock: DA Davidson

In a note on Thursday, DA Davidson analysts suggested that 2025 could be a peak year for Nvidia (NASDAQ: ) stock, maintaining a cautious outlook on the company’s long-term outlook.

Despite Nvidia’s strong performance last year, the company has raised questions about its ability to meet expectations for 2026, describing its forecast for that year as “street low.”

DA Davidson issued a neutral rating for Nvidia coverage in January 2024, citing significant concerns among the most conservative voices on Nvidia’s future prospects. This cautious stance remains unchanged, with the firm reiterating its neutral rating and $135 price target, reflecting a 35x multiple.

“We remain cautious on NVDA’s ability to meet consensus expectations in CY2026 and beyond,” the company’s analysts said, noting that while 2025 may represent a high point, sustaining growth beyond that point may be challenging.

Among the company’s key issues are supply-side disruptions, including restrictions on sales to China and quality issues with Nvidia’s Blackwell products. However, DA Davidson said these challenges “can actually prolong the cycle” as supply constraints help maintain demand in the near term.

Still, DA Davidson estimates he could be down by 2026.

“In the short-term, we expect investors to focus on supply-side disruptions, which are limited to China sales as well as Blackwell’s quality issues,” the company commented, adding, “The long-term driver will remain demand.”

Morgan Stanley has placed Tesla’s bullish position at $800

At the beginning of the week Morgan Stanley (NYSE: ) raised its price target on shares of Tesla Inc (NASDAQ: ) from $400 to $430, with a new bull case price of $800.

The Wall Street firm attributed the upgrade to Tesla’s advancements in autonomous vehicle (AV) technology and the integration of embedded AI, which are seen as critical drivers of future growth.

The report highlights Tesla’s unique expertise in data collection, robotics, energy storage and AI infrastructure, making the company a leader in the autonomous mobility market.

Tesla Mobility, the company’s standalone rideshare unit, is valued at $90 on the modified sum-of-parts (SOTP) model. The ships of the division It plans to expand to 7.5 million vehicles by 2040 with revenue of $1.46 per mile at a 29% EBITDA margin.

Morgan Stanley emphasized the growing importance of Tesla’s Network Services, which includes recurring revenue streams such as full self-driving (FSD), supercharging and software upgrades.

This segment is expected to account for one-third of Tesla’s total EBITDA by 2030, rising to nearly 60% by 2040.

“We raise our price target to $430 from $400 previously, driven by increased mobility and network service estimates,” said analysts led by Adam Jonas.

Although these opportunities are not yet included in the assessment, the bank notes that Tesla’s capabilities in AI extend beyond vehicles to areas such as aviation and maritime. Analysts expect Tesla’s unmanned autonomous vehicle fleet to begin operating in urban settings by 2026, but don’t expect widespread deployment until after 2030.

While the incoming administration may reevaluate self-driving policies nationwide, Tesla still faces “significant hurdles” in the technology, testing and permitting for the latest commercialization, the analysts added.

Morgan Stanley’s bull case calls for 12 million vehicles by 2040, $1.50 per mile in revenue with a 45% EBITDA margin, driven by global expansion and improved pricing power.

On the other hand, the bear case price of $200 per share reflects challenges such as tighter regulations and slow geographic adoption.

AMD was reduced by Wolfe’s research

Wolfe Research downgraded Advanced Micro Devices Inc (NASDAQ: ) shares to Peer Perform from Outperform, which cut the company’s 2025 data center GPU revenue expectations.

Analysts now forecast $7 billion in revenue for the segment, down significantly from earlier estimates of more than $10 billion.

“We now expect $7bn in DC GPU revenue for CY25, compared to $10bn+,” Wolfe Research wrote in a note. They also believe that AMD will refrain from providing guidance for this segment during the upcoming fourth quarter earnings call.

The decline follows visits to Asia where ODM build plans suggest modest growth for AMD.

“We estimate datacenter GPU revenue at $1.5-2.0bn for 4Q and $7bn for CY25,” Wolfe analysts added, stressing that these figures were roughly $10bn below buy-side expectations.

Challenges also extend to AMD’s other business units. Analysts forecast a 17% sequential decline for Q1 2025 due to weak PC demand, a 20% drop in gaming revenue, and a 17% decline in the customer segment that could be improved over the course of the year.

In light of these adjustments, Wolfe Research lowered its 2025 forecast for AMD’s total revenue and earnings to $29.9 billion and $4.19 per share, down from its previous estimate 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, which is slated for release in the second half of 2025.

TD Cowen raises to buy SAP stock.

TD Cowen upgraded shares of SAP SE ADR (NYSE: ) to Buy from Hold, raising their price target to $305 from $240.

The redesign was supported by a survey that showed a significant increase in Cloud Enterprise Resource Plan (ERP) prioritization, with AI emerging as a key driver of ERP migration.

“The combination of growth acceleration + margin expansion is set to continue in ’27 and put further pressure on valuations,” wrote analysts led by Derek Wood.

TD Cowen 2025 Software (ETR:) Spending Survey found that ERP came in third out of 11 categories for SaaS spending priorities, up four spots from last year. Additionally, SAP partners’ quarterly surveys in Q4 showed improved performance and a strong growth outlook for 2025, with expectations rising to +7%, compared to +2% in the same period last year.

The organization highlights the demand for cloud ERP, which has shown resilience through 2024 and is expected to increase rapidly over the next three years. This growth is driven by a 2-3x revenue shift on cloud migration, the 2027 end-of-life for SAP’s legacy ECC product, and high adoption rates on adjacent products.

The company is expected to benefit from reduced drag from IaaS and marketing products, along with an increase in average selling price (ASP) from new AI and data offerings.

According to TD Cowen, SAP is going to use AI in two main ways: to accelerate cloud ERP migration and by monetizing GenAI features in Premium SKUs, which will provide a roughly 30% price increase.

For its Q4 earnings report on January 28, TD Cowen expects SAP to achieve another five-year high in cloud growth.

TD Cowen analysts forecast around 200 basis points of accelerating cloud growth of nearly 29% in constant currency (CC), higher than the Street’s expectation of 28% CC. Additionally, the recent strength of the US dollar is projected to provide a tailwind, prompting TD Cowen to raise its FY25 estimates.

Accelerating growth and expanding margins continue to move upward in SAP’s assessment, analysts said.

The best choice for 2025 Snowflake in Oppenheimer

Oppenheimer’s analysts confirmed it again Snowflake Inc (NYSE: ) top pick for 2025, citing strong expectations for the company’s performance and strategic growth initiatives. The firm raised its price target to $200 from $180.

The positive outlook is based on several key factors that give Snowflake its potential for success.

First, Oppenheimer suggests a favorable setup for FY26, with initial guidance likely to yield a slight upside.

Analysts expect “beating and scaling performance” during the year, driven by new product launches and increased AI workloads. Innovations like Snowpark, Dynamic Tables, and Cortex have been implemented to drive higher consumption and accelerate revenue growth.

It also suggests a change in attitude towards investment banking icebergs. While concerns about lost storage revenue in FY25 initially clouded expectations, Oppenheimer now sees Iceberg as a growth catalyst for FY26. Analysts believe that it will play a significant role in increasing consumption and strengthening the revenue streams of snowflakes.

Momentum in Cortex and AI is another critical driver, according to the note. As the freedom of the cloud and large-scale language modeling (LLM) continues to gain traction, customers are increasingly incentivized to build applications on the Snowflake platform, leveraging its superior capabilities to handle AI workloads.

Finally, Oppenheimer expects operating margin expansion as investment levels normalize after a period of increased spending in FY25, creating opportunities for improved profitability.

“Net, alongside new products, we see good support for expanding the use of AI and improving consumption with better margins,” the analysts concluded.