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!
Tariffs could “blow up Apple,” analyst says
Rosenblatt is warning that newly announced tariffs by U.S. President Donald Trump could have serious consequences for Apple Inc (NASDAQ:AAPL), with analyst Barton Crockett stating the move “could blow up Apple.”
The firm estimates that Apple may face around $39.5 billion in tariff costs, largely due to the company’s reliance on manufacturing in China and Vietnam.
Nearly all iPhones sold in the U.S., along with major portions of Macs, iPads, Apple Watches, and AirPods, are produced in China, making the company particularly exposed.
If Apple chooses to absorb the full impact, Crockett estimates it would result in a 32% decline in both operating profit and EPS on an annualized basis. Passing those costs on to consumers may not be feasible.
“Apple might want to raise prices to offset this. But we estimate that +/- 40% price hike on devices would be required to fully offset tariff costs. That would likely depress demand. So we’re not sure it’s worth it or workable,” he said.
The competitive landscape could also change, with Samsung potentially gaining an edge. Despite also facing a 25% tariff on South Korean imports, Samsung produces fewer of its devices in China, which could result in a relative advantage.
Moreover, there are concerns over potential retaliation from Beijing. Crockett pointed to risks such as consumer backlash in China or policy moves that favor local manufacturers over Apple.
Shifting iPhone production to the U.S. would be difficult to execute in the near term. According to the analyst, a large-scale transition “could not occur at scale within the next few years.”
Crockett admitted the firm had previously expected Apple to be spared due to its status as a national icon. “That could still happen. But our thesis and estimates are clearly at risk,” he warned.
Amazon’s revenue growth to be ‘back-end loaded’: Mizuho
Mizuho expects Amazon Web Services (AWS) to experience “back-end loaded” revenue growth in 2025, as short-term signals point to some softness in sales momentum and growing competitive pressure.
Despite this, the brokerage noted that AWS's full-year budget still targets 20% year-over-year growth.
In a recent customer survey, Mizuho found that “sales cycles slowed modestly,” especially in financial services, though the slowdown is not nearly as sharp as in 2022, when “lead time for deal closings to slow by 50%.” This time, the deceleration appears more sentiment-driven than a result of economic deterioration.
To address growing demand for AI services, AWS has introduced new incentives, including “an additional 10% to 20% price discount for AI inferencing” offered to long-term customers.
However, Mizuho flagged rising competition, particularly from Google (NASDAQ:GOOGL) Cloud Platform (GCP), which has been undercutting rivals to secure long-term deals. “GCP appears to be positioned to win new contracts” with offers of “up to 30% discount for customers signing long-term deals,” the note said.
As a result, Mizuho expects AWS growth in the first quarter of 2025 to come in “in-line to modestly below consensus,” with tougher year-over-year comparisons weighing on results in the early part of the year.
“The shape of revenue acceleration would likely be back-end loaded,” it added.
Mizuho maintained its Outperform rating on Amazon.com Inc (NASDAQ:AMZN) and a $285 price target, viewing the current softness as a “timing issue” rather than a reflection of weakening fundamentals.
While “elevated competitive activity” continues to pose a headwind, the firm sees long-term opportunity in areas such as regional banking, where it estimates a $60 billion cloud migration pipeline over the next five years.
ASML (AS:ASML) downgraded at Mizuho on “2026 business outlook”
Mizuho downgraded ASML (NASDAQ:ASML) to Neutral from Buy, citing a “downside risk to 2026 business outlook,” and cut its price target to 650 euros from 810 euros.
The investment banking firm noted increased customer concentration with Taiwan Semiconductor Manufacturing (NYSE:TSM) could add volatility, and warned of a pull-in of EUV shipments for TSMC in 2025 that may result in lower shipments in 2026.
“We now forecast ASML’s sales to drop 3% YoY and EPS to stay flattish YoY in 2026,” Mizuho said. The firm projects total EUV shipments to decline to 49 units in 2026 from 53 in 2025.
It also notes that “TSMC’s EUV shipments might decline to 15 units in 2026 from 18 units in 2025,” despite rising capacity at the Taiwanese contract manufacturer.
Mizuho expects limited upside from Samsung (KS:005930) and Intel (NASDAQ:INTC) in 2026 but sees ASML’s Q1 results reaching the high end of guidance, helped by China demand.
While the firm still sees a year-over-year decline in China sales in 2025, it revised its forecast to a 35% drop from the earlier 45%.
Bernstein flags uncertainty, downside risks for chip stocks after new tariffs
Bernstein flagged higher uncertainty and downside risk for semiconductor stocks after former President Donald Trump unveiled a new tariff plan. While chips themselves remain exempt for now, the brokerage warned that indirect consequences could be significant.
Bernstein’s analysts said the initial 10% baseline tariff was “better than expected,” but market sentiment shifted quickly as reciprocal measures appeared “much worse than anticipated.”
Semiconductors may be spared directly, but many of the products that rely on them—such as computer equipment and smartphones—could face tariffs nearing 40%, according to analysts.
In some cases, combined tariffs could exceed 50%. The note also highlighted that foreign-made cars, which rely heavily on chips, “will face a 25% tariff in many cases.”
Markets responded sharply, with Bernstein observing that “the U.S. aftermarket is trading down 300-400 bps as a result,” and more volatility is expected as the implications unfold.
The biggest concern for the sector is not direct tariffs but knock-on effects. Bernstein warned of “indirect, i.e. demand destruction, supply chain disruption, etc.”
The analysts acknowledged the difficulty of assessing the full impact at this stage. “We suppose we will have to see what else comes out from the White House in the future,” they wrote.
Overall, the outlook was downbeat. “We don’t see much in the way of positive feelings here for the semi group (or frankly for anything else),” the firm concluded.
Rosenblatt ups Coherent to Buy on expected re-acceleration in AI transceivers
Rosenblatt analyst Mike Genovese upgraded Coherent (NYSE:COHR) to Buy from Neutral and set a new price target of $85, citing optimism around AI-driven demand and strong momentum in transceiver markets.
“We are upgrading Coherent from Neutral to Buy because we are upbeat on sequential re-acceleration in AI transceivers by 2HCY25 driven by the Blackwell rollout, and coherent/ZR transceiver demand for DCI and Telco applications that is very strong,” Genovese wrote in a note.
The analyst voiced confidence in the long-term prospects for the transceiver market.
“We are bullish on the transceiver market through 2030, and increasingly view CPO as more of an opportunity than threat because of new products like Ultra-High Power (UHP) lasers and Optical Circuit Switches (OCS).”
Rosenblatt highlighted Coherent’s progress in commercializing 200G VCSELs and 100G and 200G EMLs, as well as the positive impact of new CEO Jim Anderson. The investment bank also flagged the company’s upcoming Analyst and Investor Day at the NYSE on May 28 as a potential catalyst.
While the stock has pulled back to below 13x forward earnings—its historical pre-AI valuation—Rosenblatt is not revising estimates. Genovese noted that “the buy side believes numbers need to come down due to demand destruction from the new tariffs, including 24% on Malaysian goods.”
Still, the analyst remains positive on demand trends, referencing encouraging signals from the Optical Fiber Conference and uncertainty around the final shape of tariffs.
“We consider Coherent to be a long-term leader in AI Optics, and we are upgrading the stock to Buy,” Genovese wrote.