1. Apple Warned: GenAI Strategy Needed or Risk Falling Behind
Needham has issued a stark warning about Apple’s (NASDAQ:AAPL) position in the generative AI race. Analyst Laura Martin cautioned that the company risks falling further behind rivals unless it outlines a clear GenAI strategy during its upcoming Q3 earnings.
“We do not believe that Apple can remain on the sidelines, without a clearly articulated GenAI strategy and action plan,” Martin wrote.
Martin flagged the widening tech gap between iOS and Android, calling it an “existential risk” for a company heavily reliant on iPhone-driven hardware and services revenue. She also raised concerns about mounting expenses, suggesting Apple may need to sign a multi-billion-dollar licensing deal with Anthropic or another LLM provider—or ramp up its capital expenditures to build internal GenAI infrastructure.
If Apple fails to act, it could lose top AI talent to competitors like Meta (NASDAQ:META), OpenAI, and Anthropic, Martin warned.
Apple shares are down 14% year-to-date, lagging the S&P 500’s 8% gain—reflecting investor concern over the company’s slow AI rollout. With no clear GenAI revenue stream, unlike Google (NASDAQ:GOOGL) or Amazon (NASDAQ:AMZN), Apple’s high P/E multiple of 27.7x may come under pressure.
Martin concluded, “We believe AAPL’s share price will fall once investors understand the investment levels required to catch up with other Big Tech firms that were early adopters of GenAI.”
2. Amazon Price Target Raised by BofA on Strong Q2, AI Tailwinds
Bank of America has increased its price target on Amazon (NASDAQ:AMZN) to $265 from $248, reaffirming a Buy rating. The upgrade reflects expectations of a strong Q2 performance and improving AI-related momentum in AWS.
BofA now forecasts Q2 revenue of $164B (vs. $162B consensus) and profit of $17.8B (vs. $17.0B consensus and $17.5B top-end guidance). Internal data, including card transactions and Bloomberg Second Measure, support stronger-than-expected retail trends—particularly in North America.
The bank also expects international results to benefit from FX tailwinds, with the euro up 5% YoY and 8% QoQ versus the dollar.
Looking ahead, BofA anticipates Q3 revenue guidance between $169B and $174B, with EBIT between $14B and $18B—below consensus expectations of $19.4B. Recent AWS job cuts may support margin improvements in the second half, while AI demand and a growing backlog remain key drivers.
“AWS is the key stock driver in 2H ‘25,” BofA stated, noting Amazon’s valuation at 13.4x 2026 EV/EBITDA offers room for multiple expansion.
3. AMD Upgraded to Buy on Rising CPU and GPU Demand
Erste Group upgraded AMD (NASDAQ:AMD) to Buy from Hold, citing strong growth prospects in high-performance computing for data centers. Analyst Hans Engel highlighted increasing demand for AMD’s CPUs and GPUs heading into 2025.
Engel also expects improving operating margins to drive significant profit growth next year, saying, “The stock price should continue to rise due to the company’s good growth prospects.”
4. ASML Named Top Semicap Pick for 2026 by New Street
New Street Research upgraded ASML (NASDAQ:ASML) to Buy, setting a €790 price target. The firm said ASML is well-positioned to outperform peers in the semiconductor equipment (semicap) space, thanks to its leadership in advanced chipmaking tools and minimal exposure to market share loss in China.
Despite consensus projecting just 2% revenue growth for ASML in 2025, New Street sees this as overly conservative. It expects ASML’s leading-edge wafer fab equipment exposure to fuel stronger growth.
Trading at 25x forward earnings—below both historical levels and peers like KLA—ASML offers limited downside risk, the firm added. The €790 target is based on 25x estimated 2027 EPS of €31.90.
5. BCA: AI Will Destabilize Geopolitics and Domestic Policy
BCA Research’s Chief Geopolitical Strategist Matt Gertken warned that AI is set to disrupt both domestic politics and global security. His comments follow recent moves by former President Trump to ramp up AI innovation and pressure the Fed.
“Artificial intelligence will destabilize domestic politics and international security,” Gertken wrote, citing risks of increased polarization and growing distrust between global powers.
He anticipates the U.S. may respond with higher corporate taxes and “creative fiscal policy” targeting tech giants. AI-driven military advancements could also deepen strategic tensions, while rapid information flow may not translate into better global cooperation.
These forces, he said, could intensify market volatility and lead to unpredictable shifts in economic policy over the coming years.
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