5 big analyst AI moves: Questions over Nvidia’s momentum; AMD downgraded
Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
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2025 could be peak for Nvidia stock: D.A. Davidson
In a Thursday note, D.A. Davidson analysts suggested that 2025 could be the peak year for Nvidia (NASDAQ:NVDA) stock, maintaining a cautious view on the company’s long-term outlook.
Despite Nvidia’s strong performance over the past year, the firm raised questions about its ability to meet 2026 expectations, describing its forecast for that year as "street low."
D.A. Davidson initiated coverage of Nvidia in January 2024 with a Neutral rating, flagging significant concerns that positioned the firm among the most conservative voices on Nvidia’s future prospects. This cautious stance remains unchanged, with the firm reiterating its Neutral rating and a $135 price target, reflecting a 35x multiple.
"We remain cautious on NVDA’s ability to meet consensus expectations for CY2026 and beyond," the firm’s analysts stated, stressing that while 2025 may represent a high point, sustaining growth beyond that could prove challenging.
Among the firm’s key concerns are supply-side disruptions, including restrictions on sales to China and quality issues with Nvidia’s Blackwell products. However, D.A. Davidson noted that these challenges could "actually prolong the cycle," as supply constraints may help maintain demand in the near term.
Still, D.A. Davidson anticipates a potential slowdown in 2026.
"Shorter-term, we expect investors to focus on the supply-side disruptions, namely limits on sales to China as well as Blackwell quality issues," the firm commented, adding that the "longer-term driver will remain demand."
Morgan Stanley sets Tesla bull case at $800
Earlier in the week, Morgan Stanley (NYSE:MS) raised its price target for Tesla Inc (NASDAQ:TSLA) shares to $430 from $400, with a new bull case valuation of $800.
The Wall Street firm attributes the upgrade to Tesla's advancements in autonomous vehicle (AV) technology and its integration of embodied AI, which are viewed as critical drivers of future growth.
The report highlights Tesla's unique expertise in data collection, robotics, energy storage, and AI infrastructure, positioning the company as a leader in the autonomous mobility market.
Tesla Mobility, the company’s autonomous rideshare division, is valued at $90 per share in the updated sum-of-the-parts (SOTP) model. The division’s fleet is projected to expand to 7.5 million vehicles by 2040, generating $1.46 per mile in revenue with a 29% EBITDA margin.
Morgan Stanley also underscores the growing importance of Tesla's Network (LON:NETW) Services, which include recurring revenue streams such as Full Self-Driving (FSD), supercharging, and software updates.
This segment is expected to account for one-third of Tesla’s total EBITDA by 2030, increasing to nearly 60% by 2040. The Network Services division is now valued at $168 per share, reflecting its rising significance within Tesla's overall business model.
“We raise our price target to $430 from $400 previously, driven by increases in our Mobility and Network Services valuations and partially offset by a decrease in our 3rd Party Battery business valuation,” analysts led by Adam Jonas wrote.
The bank notes that Tesla’s potential in embodied AI extends beyond vehicles to areas like aviation and marine, though these opportunities are not yet included in the valuation. Analysts expect Tesla's unsupervised autonomous vehicle fleet to launch in a city setting by 2026 but do not expect widespread deployment until after 2030.