5 big analyst AI moves: Nvidia replaced as Top Pick, Pinterest downgraded

Investing.com -- Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

InvestingPro subscribers always get first dibs on market-moving AI analyst comments. Upgrade today!

Jefferies lifts Nvidia price target to $240 on booming AI compute demand

Jefferies raised its price target for Nvidia to $240 from $220 this week, citing stronger-than-expected demand for AI compute and greater visibility into the company’s order pipeline. The brokerage kept its Buy rating but removed the stock from its list of “Franchise Picks.”

Analyst Blayne Curtis said Nvidia remains the clear leader in the AI accelerator market, noting that Jefferies is boosting estimates for both Nvidia and Broadcom “to reflect takeaways from recent Hyperscaler announcements, NVDA’s outlook from GTC DC, and new CoWoS forecasts.”

Curtis described a “scramble to secure compute to meet demand,” as hyperscalers such as Google, OpenAI, and Anthropic rush to lock in AI infrastructure deals. He highlighted that Nvidia “pointed to line of sight to fulfilling $500 billion of orders in 2025/2026 between Blackwell and Rubin.”

The firm’s bottom-up model projects around $464 billion in revenue for 2025–2026, with “another $36 billion in upside assuming NVDA hits that estimate.” Jefferies raised its revenue forecasts for 2026 and 2027 to $293 billion and $384 billion, respectively, from $283 billion and $334 billion.

The brokerage now expects 2027 EPS of $9 and said its model “suggests $10+ in EPS in 2027.”

“We still see more room for the stock to work and raise our PT to $240 (27x CY27 EPS of $9.03),” Curtis wrote, adding that Nvidia remains the dominant force in AI hardware despite being dropped from the firm’s top ideas list.

Evercore removes Apple from Tactical List after strong earnings rally

Earlier in the week, Evercore ISI removed Apple from its Tactical Outperform (TAP) list following a robust September-quarter report and optimistic guidance for the December quarter. The move comes following the stock’s strong gains in the past two weeks, outperforming the broader market.

Evercore credited the rally to strong execution around the latest iPhone refresh and accelerating Services growth. Apple’s September-quarter revenue climbed 7.9% year-over-year, with Services up 15%.

The standout, Evercore said, was the December-quarter forecast. Apple guided for 10–12% revenue growth, led by double-digit iPhone sales and low-teens Services expansion.

“The iPhone revenue strength is expected to be driven by strong demand for the 17 lineup as well as some average selling price (ASP) tailwinds,” analysts led by Amit Daryanani wrote.

Story Continues

“Notably, AAPL has done a good job mitigating memory cost headwinds, as it was a tailwind in the Sep-qtr and it’s expected to have no impact on the Dec-qtr," they added.

Apple also projected sequentially higher gross margins, though operating expenses are set to rise due to incremental AI initiatives. Analysts pointed to signs of stabilization in China, where iPhone sales are expected to return to year-over-year growth in fiscal Q1 after a decline in fiscal Q4.

“We’re removing our tactical outperform following a strong print and guide from AAPL,” the analysts said, while reaffirming their Outperform rating and $300 target price.

Chief Executive Tim Cook said Apple struggled to keep up with demand for several iPhone 17 and older iPhone 16 models last quarter and faced delays launching the new iPhone Air in China — its thinnest model and biggest redesign in years.

He told Reuters the delay was the “primary reason” for weaker China sales but added, “However, we’re very enthusiastic about China. We love the response to the new products there, and we expect to grow or to return to growth in Q1.”

Jefferies names Broadcom top pick, sees ’outsized upside’ as AI chip demand surges

After removing Nvidia, Jefferies named Broadcom its new Top Pick, saying the semiconductor company is “at an inflection point” amid soaring demand for custom AI chips across major hyperscalers.

The broker raised its price target to $480 from $415 and added the stock to its list of Franchise Picks, citing “outsized upside relative to estimates.”

“We return to AVGO as our top pick as we see the larger upside to estimates as ASICs hit an inflection point,” Curtis wrote. He said Broadcom’s Application-Specific Integrated Circuit (ASIC) business is poised for rapid growth as Google, Meta, and OpenAI ramp production of their in-house AI accelerators.

Jefferies’ checks indicate Google’s Tensor Processing Unit (TPU) volumes could surge, with 2026 shipments nearing 3 million units, supported by Anthropic’s $10 billion order for about 250,000 units and additional potential follow-ons.

The firm models Broadcom’s AI-related revenue at $10 billion in calendar 2027 (C27) but said it “could easily scale to $40-50B per year in C28+” as hyperscaler expansion accelerates. Meta is expected to launch its first AI chip using high-bandwidth memory in the third quarter of 2026 and an OpenAI ASIC later that year.

Curtis raised Broadcom’s 2026 and 2027 revenue forecasts to $100 billion and $130 billion, respectively, and increased EPS estimates to $10.31 and $13.88. “

We expect numbers will have to continue marching higher and see step function estimate revisions upward over the next year,” he wrote. “Given the significant upside to numbers, we are making AVGO our top pick.”

Jefferies’ upside case envisions EPS of $20 in 2027 and potentially $30 in 2028 if OpenAI’s capacity expands by 2–3 gigawatts annually.

UBS upgrades Cisco to Buy on ’multi-year growth cycle’ from AI and security

In another notable analyst move, UBS upgraded Cisco Systems to Buy from Neutral and raised its price target to $88, saying the company is entering a “multi-year growth cycle driven by AI infrastructure demand, a large-scale Campus refresh cycle, and momentum in Security.”

“We upgrade Cisco to Buy based on a multi-year growth cycle,” said analyst David Vogt, citing surging AI infrastructure orders and improving enterprise and security demand. He highlighted that Cisco has “secured more than $2 billion in AI orders in fiscal 2025, nearly all from hyperscalers,” with “two-thirds full systems running Silicon One.”

Vogt added that enterprise and sovereign demand is also ramping, with orders “approaching $1 billion, up sharply from a couple hundred million dollars in the most recent quarter,” setting the stage for “sustained AI-fueled growth" in fiscal 2026 (FY26) and FY27.

The analyst pointed to an accelerating campus refresh cycle as customers replace outdated hardware, noting that Cisco’s installed base includes “tens of billions in aging Cat 4K/6K gear (5–15 years old).” UBS expects upgrades to “AI-enabled Smart Switches” to lift Campus growth from 5% in FY26 to about 7% in FY27.

In security, UBS said “next-gen products like Hypershield are growing more than 20%, and Splunk integration is gaining traction.” Evidence Lab survey data backed the bullish stance, with 83% of respondents expecting Cisco’s future sales to be “strong” or “very strong,” up from 71%.

Vogt also raised its 2027 EPS estimate to $4.62 from $4.34 and lifted its valuation multiple to 19 times earnings, calling Cisco “a San FranCISCO treat” that trades at over a 20% discount to large-cap tech peers.

Pinterest downgraded at Monness after ’uninspiring’ results and ’muted’ outlook

Meanwhile, Pinterest shares were downgraded this week at Monness Crespi Hardt to Neutral from Buy after what the broker called “uninspiring” third-quarter results and a “muted” outlook for the rest of the year. The stock tumbled nearly 22% Wednesday.

“Worthy of a Weak Wednesday,” analyst Brian White wrote, citing a “more challenging environment within certain advertising verticals” and “growing concerns around the competitive landscape in the gen AI era.” He said the combination of these factors “is driving us to the sidelines.”

Pinterest posted third-quarter revenue of $1.049 billion, just below Monness’s $1.062 billion estimate, and adjusted EBITDA of $306.1 million with a 29.2% margin. Earnings per share came in at $0.38, missing the firm’s $0.43 forecast.

White described management’s tone on the call as “downtrodden,” pointing to “more cautious ad spending trends at larger U.S.-based retailers” and “cautious commentary around the potential tariff impact on the home furnishings category.”

He added that Pinterest “tap danced around fulfilling long-term revenue growth targets.”

Still, the firm noted some positives, including a 12% year-over-year increase in monthly active users to 600 million, topping its 593 million projection, with gains across all regions. However, a 24% decline in pricing offset higher ad impressions.

For the fourth quarter, Monness trimmed its revenue forecast to $1.335 billion from $1.365 billion and lowered its EPS view to $0.66 from $0.73, cautioning that “competition remains fierce and the macro treacherous.”

Related articles

5 big analyst AI moves: Nvidia replaced as Top Pick, Pinterest downgraded

17 Undervalued Small-Cap Tech Stocks Primed to Outperform in Q4

Loading Up HEAVY on These 3 Stocks by End of 2025 (+ 1 New ETF)

View Comments