After Plummeting Over $1 Trillion in Value, This Super Artificial Intelligence (AI) Stock Is Mounting a Major Comeback, With Analysts Predicting Gains of Up to 400%

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

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Bank of America hikes Microsoft PT ahead of earnings

Bank of America (BofA) this week raised its price target on Microsoft Corporation (NASDAQ:MSFT) to $585 from $515 ahead of the company’s July 30 earnings release, flagging strong momentum in cloud infrastructure, encouraging partner feedback, and early signs of traction from its AI Copilot tools.

BofA said partner checks indicate deal activity in the fourth quarter was “largely in line” with Q3, supporting a “0-1% upside” to its $73.7 billion revenue estimate. Azure is expected to grow 35.5% year-over-year in constant currency, with “18.0% points from AI,” driven by cloud migrations and demand in security and data analytics.

The bank sees Microsoft’s Productivity and Business Processes segment growing 13% in constant currency, slightly above its base case. “Partner feedback suggests stable E3/E5 upgrade activity and ramping Copilot adoption,” it noted.

For the More Personal Computing segment, BofA models 3.4% growth, aided by stronger PC shipments.

Looking ahead, the firm expects 14% revenue growth in fiscal 2026, matching fiscal 2025. While its 45.5% margin forecast could face pressure from higher capital spending, BofA analysts said capex should remain “largely consistent as a % of revenue at 31%.”

Calling Microsoft its “top pick,” the analysts said the next catalyst could be “more evidence that Copilot is becoming more material to growth.” Despite a 30% rally since Q3, they see more upside as Azure and AI continue to gain ground.

Golden era of AI is just starting, analyst says

Artificial intelligence is reshaping the tech sector, and its impact is still in the early stages, according to Wedbush analysts led by Dan Ives.

In a note Friday, Ives predicted a strong second half of 2025 for tech stocks, supported by a “very strong 2Q tech earnings season” and growing AI tailwinds across chips, software, and enterprise applications.

“We have barely scratched the surface of this 4th Industrial Revolution,” he wrote, calling it a “golden age” for technology.

The analysts estimate $2 trillion in AI-related spending from enterprises and governments over the next three years. “The Street is underestimating the underlying AI-driven growth ahead,” they said, noting that “use cases are exploding” as companies scale up adoption.

Generative AI is moving into a consumption phase, which Wedbush sees as a major catalyst for software. NVIDIA (NASDAQ:NVDA), Microsoft, Meta Platforms (NASDAQ:META), Palantir (NASDAQ:PLTR), and Tesla Inc (NASDAQ:TSLA) were listed as the firm’s top tech picks for the remainder of the year.

Despite ongoing geopolitical risks and tariffs, the analysts expect a favorable policy environment. “The Trump Administration will continue to soften its stance around tariffs,” they wrote, pointing to Nvidia’s return to selling H20 chips in China as a “key strategic positive.”

Wedbush also highlighted AI’s broad ripple effect across the sector. “For every $1 spent with Nvidia, we estimate the multiplier is another $8 to $10 spent throughout the rest of the tech ecosystem,” the note said.

Apple (NASDAQ:AAPL) needs more AI to sell more hardware: HSBC

Apple’s push to boost iPhone upgrades through AI has yet to gain traction, according to HSBC analysts, who argue the company needs a more compelling AI offering to revive demand.

“The iPhone still represents about half of Apple’s sales,” the bank wrote, but “initial hopes that AI would accelerate the renewal cycle have been short-lived.”

HSBC said Apple Intelligence, announced in June 2024 and rolling out through April 2025, has “so far failed to trigger significant improvement in user experience.”

The delayed launch of AI-powered Siri may also cause users to hold off on upgrading, the analysts warned. In the meantime, Apple will have to rely on standard hardware improvements.

“Better specs with iPhone 17 in September should entertain the demand, in-line with what has been seen with the iPhone 16,” HSBC noted, assuming tariffs don’t push prices significantly higher.

Trade concerns remain a key overhang. The investment bank said Apple “cannot re-localise production fast enough to avoid U.S. tariff hikes,” and pointed out that market forecasts now assume a 20% increase in tariffs on Chinese goods.

Apple has already guided to a $900 million margin impact for the June quarter, though HSBC still expects the company to generate more than $100 billion in annual free cash flow.

Beyond trade, regulatory pressures are also building. The European Commission is probing Apple for potential Digital Markets Act violations, while a U.S. Department of Justice lawsuit introduces “long-term risk to the business model,” the bank said.

HSBC kept a Hold rating and a $220 price target, citing a “5% regulatory discount” and cautioning that legal and tariff risks may limit near-term upside.

Tesla shares may outperform after Q2 results, Barclays says

Tesla shares may outperform following second-quarter results despite deteriorating fundamentals, according to Barclays. In a recent note, the bank called the setup “confusing” but acknowledged upside potential, driven by investor focus on the company’s long-term autonomous vehicle strategy.

“We see potential for the stock to outperform,” analysts wrote, pointing to expectations that the earnings call could spotlight Tesla’s robotaxi ambitions. “The earnings call also presents an opportunity for Tesla’s robotaxi/AV narrative to shine,” they said, adding that Elon Musk may discuss fleet growth or expansion plans.

Barclays expects a modest sequential improvement in auto gross margin excluding regulatory credits, though it warned margins will “likely remain depressed vs prior years.”

The bank also anticipates a 10% decline in 2025 vehicle deliveries, noting that consensus earnings forecasts have been sharply cut. “Whereas ’25 consensus EPS was over $3.20 into the beginning of the year, it is now down to $1.84,” the note said.

The expected delay of Tesla’s low-cost model could further pressure sentiment. Barclays believes Tesla may prioritize a third-quarter pre-buy ahead of the September 30 expiration of the U.S. EV tax credit, potentially pushing the launch of the cheaper vehicle into the fourth quarter.

“Tesla likely to focus on a 3Q pre-buy...which could be perceived negatively,” the analysts wrote.

Still, Barclays argues that optimism around autonomous vehicles could outweigh weaker near-term fundamentals.

Intel stock could squeeze higher during earnings

Intel (NASDAQ:INTC) shares may be set for a short-term rally into earnings season, according to Citi, which sees potential for an upside surprise that could trigger a squeeze. Despite being one of the most shorted names in the sector, the bank believes improving fundamentals could shift sentiment.

“Intel remains the most popular short but we believe the stock could squeeze higher during earnings given potential upside to EPS,” analyst Christopher Danely wrote in a Friday note.

Citi pointed to lower capital expenditure and operating expenses, along with possible strength in the PC market—which accounts for 60% of Intel’s revenue—as key factors. The bank’s second-quarter estimates are above consensus.

More broadly, Citi held a mixed outlook on semiconductor stocks heading into Q2 results, suggesting a differentiated earnings season across the group.

Investing.com -- Artificial intelligence could double its carbon emissions by 2035, but its broader environmental applications are poised to slash five times that amount in global CO₂ output, according to Bank of America.

While energy demands from data centers are expected to triple, consuming electricity equivalent to that of Japan and driving emissions up to 300 million tons, the report says AI’s use in optimizing energy efficiency, reducing industrial waste, and managing grid reliability could cut up to 1,500 million tons of emissions over the same period.

BofA calls AI both “a drain and a driver” of sustainability, highlighting its paradoxical role in accelerating climate solutions even as it consumes more power.

The report estimates that AI-enabled tools in heating and cooling systems alone could slash energy use in commercial buildings by 30%, and that optimized logistics in global shipping could avoid nearly 48 million tons of CO₂ emissions annually.

AI’s reach extends well beyond emissions. It’s already improving early cancer detection, increasing food production through precision agriculture, and helping track illegal deforestation using satellite imagery.

These applications, the report argues, are pushing forward key United Nations Sustainable Development Goals (SDGs) across health, equity and environmental protection.

Still, the climate promise of AI comes with a caution. BofA warns that rising energy use, electronic waste, water consumption, and the potential for rebound effects, such as increased production from cost efficiencies, could offset some gains if not actively managed.

Only 16% of executives surveyed ranked environmental or ethical considerations among their top five criteria for choosing AI models.

Despite that, the net impact appears positive, with growing pressure on companies to integrate sustainability into their AI strategies.

The report identifies $10 trillion in market capitalization tied to firms developing AI tools with environmental, social, and governance benefits, across industries from healthcare to transportation.

Investing.com -- Investors are split on Atlassian (NASDAQ:TEAM) ahead of its fiscal fourth-quarter earnings, with Bernstein stating in a note this week that it has become “one of the most debated names in our coverage.” 

The key question heading into the results, according to the firm, is: “Should we own it into the print, or wait to buy a dip after?”

Bernstein maintained an Outperform rating and a $310 price target on the stock, citing long-term strength and upside potential despite near-term uncertainty around guidance. 

“The real anxiety surrounds the upcoming FY26 guidance and how the company will balance its 3-year 20% CAGR target with a desired beat and raise cadence,” analysts wrote.

While the firm expects FY26 growth to reach 21% to 22%, it anticipates that Atlassian may initially guide to only around 17% growth. 

That’s below both the 3-year 20% CAGR target and the current sell-side consensus of ~19%. Still, Bernstein said: “Investors we spoke with seemed to believe a FY26 17% growth guide would thread the needle, and be received positively.”

For FY25, the outlook is said to be more confident. Bernstein expects growth “closer to 20% vs. the initial ‘de-risked’ 16% guide.” 

They believe cloud revenue should remain in the low-20% range, supported by price increases and stable seat expansion, while Data Center could grow 20%+ due to pricing strength.

“Net net: we see line of sight to 20%+ CAGR… and risk seems to be to the upside,” Bernstein concluded. 

The firm believes concerns around Rovo monetization and developer employment may be “overblown,” and any downside from seat reductions “won’t materialize (and may end up a tailwind).”

Investing.com--  As the greenback continues to loses altitude, with little sign of come back anytime soon, global investors are asking: will a weaker dollar finally deliver a boost to Chinese A-shares, or will the benefits be more muted this time around?

“A weaker dollar is positive for global equities, EM in particular. Based on the beta over the last decade, UBS calculates that 10% off the DXY adds 9% to EM’s relative performance.”

But for China’s A-shares, the benefit may be limited. Foreign ownership makes up just 3.4% of the market cap in China’s A-shares as of end-Q1 2025, so any boost from weaker dollar-driven inflows remains modest, UBS said. A-shares account for only 17% of the MSCI China Index, underscoring their relatively small footprint in global portfolios.

Sectors with high exposure to USD-denominated debt—such as home appliances, transportation, non-ferrous metals, and electronics—are likely to receive the biggest earnings boost from a weaker dollar, as their financing costs ease.

For investors tracking cross-border market dynamics, UBS points to the “A/H premium”—the price gap between a company’s A-shares, traded in Shanghai or Shenzhen, and its H-shares, traded in Hong Kong. The A/H premium serves as a barometer of cross-border sentiment and liquidity, reflecting how much more (or less) investors are willing to pay for the same company in the two markets.

“The A/H premium has closely tracked the DXY over the past 15 years, with a correlation coefficient of 0.83,” the analysts said. While it may seem counterintuitive, given the HKD’s peg to the USD, the premium tends to rise when the dollar strengthens—driven more by differences in onshore and offshore liquidity than by direct FX effects. H-shares, with their greater weight in emerging market indices, have benefited more from recent global fund inflows, while A-share liquidity remains constrained.

Looking ahead, UBS expects the A/H premium to “stay at the bottom of its medium-term range” in the second half of 2025, unless there is a significant pickup in A-share liquidity. Southbound flows into Hong Kong-listed shares have surged, but incremental liquidity into A-shares has been limited, suggesting any boost from a weaker dollar could remain contained.

Investing.com -- The fragmented structure of America’s freight rail network is quietly limiting its potential, with less economic access across regions and dragging down logistics efficiency.

Only about 12% of the U.S. economy currently enjoys direct rail connectivity to the rest of the country.

That means nearly nine out of ten regions depend on interchanges between separate railroads, a process that adds cost, delays, and operational friction. For many businesses, this makes rail either less competitive or entirely unviable for long-haul freight.

At the heart of the issue is the country’s division into four major rail “fiefdoms,” shaped by a century of industry history and regulatory constraints.

These regional operators, while dominant in their geographies, rarely connect seamlessly. Freight originating in one railroad’s domain often has to be transferred mid-journey to a second carrier, a costly handoff that slows transit and complicates scheduling.

Analysts at Bernstein say that this structural inefficiency could be solved by allowing mergers between eastern and western rail giants, transcontinental combinations that have been off the table since regulators imposed strict rules in 2001 aimed at protecting competition.

But those rules, designed to preserve access, now stand in the way of stitching together a rail network that serves the U.S. as a unified market.

The economic payoff of such integration could be significant. Single-line service, where a shipment stays on one carrier’s system from origin to destination, is not only faster and cheaper, it also enables better network planning and fewer handoffs.

Every major rail merger since deregulation has cited these benefits.

Reviving the idea of a coast-to-coast rail network, Bernstein frames the challenge in historical terms: connecting the country’s industrial heartlands in a way not seen since Abraham Lincoln signed the Pacific Railway Act in 1862.

Whether regulators will revisit merger restrictions remains uncertain. But as pressure builds on supply chains and freight efficiency takes on new urgency, the case for a less fractured rail system may gain traction, especially if shippers themselves start demanding it.