5 Major Analyst Moves in AI Stocks: Tesla, AMD Downgraded; Salesforce Shines

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Key AI stock updates: Tesla risks, AMD concerns, Salesforce named top pick for 2025.

Key Updates on AI Stocks

Tesla: High Execution Risks Lead to Downgrade

Bank of America (BofA) recently downgraded Tesla (NASDAQ:TSLA) from “Buy” to “Neutral,” citing execution risks in its ambitious plans. The price target, however, was raised from $400 to $490, reflecting Tesla’s potential in robotaxis, energy businesses, and Full Self-Driving (FSD) technology.

Highlights of Tesla's Valuation

  • Robotaxis: Expected to roll out by mid-2025, projected to be a $420 billion market in the US and over $800 billion globally.
  • FSD Technology: Valued at $480 billion, with an estimated 23 million vehicles featuring FSD by 2030, scaling to 75 million by 2040.

Despite its promising future, BofA flagged policy risks and competition from Uber and Lyft as challenges. Tesla's ability to scale its Shanghai-based Megapack production and launch new models in 2025 remains crucial.

AMD: Concerns Over AI GPU Market Competitiveness

HSBC analysts downgraded AMD (NASDAQ:AMD) from “Buy” to “Reduce” and slashed its price target from $200 to $110. The downgrade stemmed from concerns about AMD’s AI GPU roadmap and the lukewarm reception of its MI325 GPU.

Key Issues Highlighted:

  • Lowered FY25 AI GPU revenue projections: From $12.3 billion to $8.1 billion.
  • Challenges in competing with Nvidia’s NVL rack platform.
  • Expected delays in launching competitive AI solutions until late 2025.

AMD faces additional challenges in client business momentum and non-AI data center growth, prompting analysts to predict a continued downturn in the stock.

Salesforce: The 2025 Top Pick in Enterprise Software

Needham & Company named Salesforce Inc. (NYSE:CRM) its top pick for 2025 in the Enterprise Software sector, raising its price target to $400.

Reasons for Optimism:

  • Agentforce Strategy: Integral in nearly half of enterprise deals, with expectations for significant expansion in late 2025.
  • AI-Driven Growth: Salesforce’s aggressive hiring of AI-focused sales representatives is set to bolster bookings in the latter half of the year.
  • Halo Effect: Enhanced adoption of complementary products like Mulesoft.

With its focus on AI adoption and free cash flow growth, Salesforce is positioned for a strong 2025 performance.

The 2025 AI Inflection Point: Evercore ISI Insights

Evercore ISI projects 2025 as a pivotal year for widespread AI adoption across industries. While enthusiasm for AI surged in 2024, actual implementation lagged due to cautious corporate spending.

Transformative Developments in AI:

  • Generative AI Progress: Advances in robotics, autonomous agents, and manufacturing tools.
  • Skilled Labor Impact: AI’s role in addressing labor shortages and reshaping work dynamics.

Evercore analysts emphasize the importance of AI ecosystem players, including "Enablers, Adopters, and Adaptors," as businesses integrate AI to remain competitive.

Adobe: Challenges in Monetizing AI Capabilities

Deutsche Bank downgraded Adobe (NASDAQ:ADBE) to “Hold” due to uncertainties in monetizing its generative AI tools like Firefly.

Analyst Concerns:

  • Slowing net new annual recurring revenue growth for the third consecutive year.
  • Unclear financial impact of AI investments.
  • Increased competition from Stability AI, Midjourney, and OpenAI.

Adobe remains heavily invested in AI but faces scrutiny as investors await tangible financial performance improvements.

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