Investing.com — Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
Bank of America said artificial intelligence remains the dominant theme for internet and eCommerce stocks heading into 2026, with large-cap performance driven by AI sentiment, returns on capital spending, and clearer paths to monetization.
Analysts led by Justin Post said enthusiasm around AI continues to build and that “peak optimism” may not emerge until high-profile, AI-focused companies begin to list publicly. Until then, investor focus is likely to stay on established platforms with scale, data and distribution advantages.
Within that backdrop, the team highlighted Amazon, Google and Booking as its best-positioned large-cap AI plays across eCommerce, Media and Travel.
For Amazon, the analysts see benefits from “underappreciated benefits from 2025 capacity additions,” alongside accelerating cloud demand and improving returns from AI investment.
They also pointed to Amazon’s expanding role in agentic AI, which they believe could enhance shopping experiences, advertising effectiveness and conversion rates over time.
Google is expected to benefit from multiple AI-related tailwinds. The team cited Gemini-driven traffic growth, upside from cloud services and the company’s broad exposure across search, advertising and AI infrastructure.
The tech giant is “best positioned across AI,” they said, supported by improving sentiment following recent product launches and partnerships, as well as its ability to capture AI-driven advertising and subscription revenue.
In online travel, BofA described Booking as a standout beneficiary of agentic AI. The analysts highlighted the potential launch of an agentic booking product in 2026, which could simplify trip planning, improve personalization and drive higher user engagement across the platform.
Earlier in the week, Bernstein upgraded ASML shares to Outperform and named it its top pick among European semiconductor stocks for 2026, pointing to accelerating memory investment, firmer logic demand and a more supportive valuation backdrop.
The broker raised its price target to €1,300 from €800.
Analyst David Dai said the Dutch chipmaking equipment supplier is set to benefit disproportionately from an emerging DRAM upcycle, arguing that the market is underestimating the scale of planned capacity expansion.
He estimates the three largest DRAM producers are adding up to 250,000 wafers per month of greenfield capacity in 2026, while also accelerating the transition to the 1c node.
“This is great for ASML, as litho intensity for 1c is 28% based on our estimates, much higher than previous nodes of 20–24%,” Dai wrote.
He also said near-term risks tied to DRAM technology shifts have eased. Concerns around a move to a 4F² structure, which would be negative for extreme ultraviolet tools, appear delayed as suppliers prioritise manufacturability over cost in a strong demand environment. This, in his view, supports higher EUV usage through the second half of the decade.
Advanced logic represents another major growth driver. Dai pointed to plans by leading foundries to expand leading-edge capacity to meet AI-driven demand, with a focus on 3-nanometre production. He noted that 3nm carries the highest lithography intensity and is expected to underpin most GPUs and AI accelerators over the next two years.
As such, Dai described 2026 and 2027 as “big years for EUV and for ASML,” and raised his expected earnings growth to an 18% compound annual rate over 2025–27, above a 15% consensus view.
Morgan Stanley this week cut its price target on Alibaba to $180 from $200, flagging a weakening outlook for the group’s core e-commerce operations even as momentum in cloud computing remains intact.
Analyst Gary Yu reiterated an Overweight rating but said the fundamentals in e-commerce are deteriorating. He warned that “core e-comm businesses have started to worsen, due to weak consumption,” adding that the segment “may remain under pressure” in the first half of fiscal 2027 “due to a high base.”
But the bank’s view on cloud remains positive. Yu said Alicloud’s performance continues to support Alibaba’s positioning as “China’s Best AI Enabler,” underpinned by accelerating demand tied to AI workloads.
The analyst expects Alicloud revenue growth to accelerate to at least 35% year on year, while EBITA margins are forecast to remain stable at around 9%, reflecting scale benefits despite higher AI-related investment.
By contrast, near-term trends in commerce are expected to soften. Yu sees customer management revenue growth slowing sharply to “3% YoY (vs. 10% in 2Q),” pointing to weaker online retail sales and “intense industry competition.” As a result, China e-commerce EBITA, excluding QC, is projected to decline by 3%.
Pressure is also building at the group level. Morgan Stanley forecasts consolidated adjusted EBITA to fall “45% YoY to Rmb30bn,” partly driven by widening losses in the “All Others” segment, which is expected to post a Rmb7 billion loss as AI-related costs rise.
Morgan Stanley cut its adjusted EBITA estimates by 7% for F26 and 15% for F27, driven by weaker CMR assumptions, while keeping its cloud valuation unchanged at $84.
BMO Capital Markets downgraded Adobe to Market Perform from Outperform, saying the shares lack a clear catalyst even though the valuation appears reasonable. The broker cut its price target to $375 from $400 and left its earnings estimates unchanged.
The downgrade follows BMO’s seventh proprietary Creative Cloud survey, which showed competition intensifying across the creative software market. The pressure was most evident among smaller businesses, students, and freelancers, where alternatives are gaining traction.
“While Adobe’s current valuation is undemanding, we do not envision positive catalysts and think the shares will remain range-bound,” analyst Keith Bachman wrote in a note on Friday.
Bachman said he does not believe application software is structurally broken, but added that investor sentiment toward the sector is likely to stay cautious into 2026. In his view, near-term performance will hinge on “evidence of steady or improving growth,” including how effectively artificial intelligence features translate into usage and monetization.
Over the longer term, the analyst said application software will continue to play an important role, but competitive dynamics are becoming more challenging. Within front-office software, Bachman said he prefers HubSpot and Salesforce, arguing that Adobe now has the “weakest competitive positioning” of the three.
He pointed to rising pressure within Creative Cloud and a growing willingness among users to rely on third-party tools across different stages of the creative workflow as key concerns.
As a result, BMO sees limited upside in the near term. “We do not envision a clear catalyst for the stock,” Bachman wrote.
Geopolitical tensions around Taiwan are adding uncertainty to the global AI trade, according to Yardeni Research.
“Of all the ways President Donald Trump’s bromance with China’s President Xi Jinping could go awry, Beijing’s moving against Taiwan could be the quickest,” Yardeni wrote in a report, highlighting speculation in Chinese online forums that recent U.S. action in Venezuela might embolden Beijing.
Yardeni warned that the notion of Xi choosing 2026 to assert control over Taiwan “is no longer as far-fetched as Asian leaders and investors had hoped,” a shift that would have profound implications for global markets and the semiconductor ecosystem.
Recent military activity, including rocket firings into waters near Taiwan after Washington approved a record arms package for Taipei, has compounded concerns. Investors fear U.S. operations in Venezuela could unintentionally provide political cover for China to escalate pressure on the island.
Taipei remains on high alert, with anxiety heightened by the broader geopolitical context since Russia’s invasion of Ukraine and mixed signals from U.S. allies about defending Taiwan.
Yardeni outlined reasons why Xi might still refrain from overt action, including the risk of sweeping Western sanctions and severe economic fallout. But he warned that China “is unlikely to accept losses quietly,” pointing to potential measures such as rare-earth export bans and dumping of U.S. Treasuries that could unsettle markets.
Any blockade or invasion of Taiwan would disrupt supply chains and reverberate through the AI trade. Taiwan Semiconductor Manufacturing Company, a critical provider of advanced AI chips whose shares have jumped over the past year, accounts for a dominant share of Taiwan’s market cap and global chip production.
Chinese control of TSMC, alongside rare-earth resources, “would be quite a bargaining chip in U.S. trade talks,” Yardeni said.
“We aren’t predicting that any of this will happen in 2026. However, Trump’s actions in Venezuela increase the likelihood of a reaction from China,” it added.
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