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

Nvidia pullback is overdone, analyst says

The recent weakness in Nvidia shares looks out of step with the strength of near-term fundamentals, according to Morgan Stanley, which said investors remain focused on why the stock has lagged in a “very robust AI environment.”

Analyst Joseph Moore said the team has been “somewhat surprised at Nvidia’s underperformance YTD after a weak close to 2025,” adding that one of the most frequent investor questions is what has driven the pullback and how those overhangs could clear in 2026.

He said “checks remain very strong, and getting stronger,” while optimism around earnings is already building across the market. Moore noted he is increasingly hearing “references to $9+ in earnings power this year, vs. consensus $7.75,” which he said makes near-term upside “highly likely.”

Several of the concerns weighing on sentiment appear overstated, in the analyst’s view. Moore pointed to the fact that “the number of AI beneficiaries are broadening out” as demand accelerates and supply constraints ripple across the industry.

Some investors are also focused on financing issues tied to frontier model developers and “Nvidia’s role in that financing,” which Moore said will require “some adjustment” in how the market interprets the risk.

Meanwhile, worries about rising competition from custom ASICs and AMD continue to surface but are “overblown,” according to the analyst.

Looking ahead, Moore highlighted the upcoming Vera Rubin platform as a major catalyst that should provide a “strong demonstration of NVIDIA’s leadership” and help ease concerns around share momentum.

“The bottom line is that we see the stock outperforming from here,” he wrote, noting that while Nvidia still faces a “wall of worry to climb,” the company appears well positioned to move beyond it.

Apple faces fresh margin pressure as NAND costs surge, Lynx warns

Apple may be heading into a sharper profitability squeeze than the market is pricing in, according to the brokerage firm Lynx Equity Strategy, which sees “further downside” for the shares even after their roughly 10% decline so far this year.

The firm said its channel checks point to rising memory costs, with Apple now facing “the unpleasant prospect of an abrupt spike up in NAND flash pricing” following a breakdown in talks with long-time supplier Kioxia.

Lynx wrote that “bad blood” has developed after Kioxia’s lower long-term-agreement pricing for Apple created a “margin shortfall” at the supplier. As a result, Kioxia “may be shipping to Apple less than Apple’s forecasted demand,” forcing the company to look elsewhere for supply.

That shift could prove costly. Lynx analysts said Apple has been “forced to approach Samsung to fill the supply shortfall,” and without long-term contracts in place, Samsung is “free to quote current market price,” potentially at much higher levels.

An overnight Taiwan report cited by Lynx suggests Samsung “may have ratcheted up NAND pricing by as much as 100%,” with Apple likely among the impacted customers.

Beyond higher costs, Lynx also flagged technical concerns. Apple’s flash controller is “optimized for Kioxia’s NAND process,” and “will not work well with Samsung’s NAND process,” raising the risk of performance problems and possible product returns.

“The Street is underestimating the impact,” Lynx said, warning that both margins and the stock could remain under pressure in the period ahead.

ASML lifted at Barclays on record orders, more upside room

ASML shares climbed earlier this week after Barclays upgraded the stock to Overweight, citing surging orders, accelerating AI-led demand and upside scenarios it believes are still not fully priced in.

“Expectations were high heading into results but the hope materialised into record orders which drives material upgrades to estimates,” analyst Simon Coles said.

Barclays lifted its price target to €1,500 from €1,200, arguing there remains “scope for further upside” as ASML’s guidance appears conservative despite strengthening fundamentals.

The company reported record order intake of €13.2 billion, nearly double last year’s level and well ahead of expectations. It also raised its 2026 revenue outlook to €34 billion–€39 billion, above consensus forecasts and stronger than its prior view for largely flat growth versus 2025.

Alongside the upbeat demand picture, ASML announced plans to cut around 1,700 jobs as part of a broader restructuring aimed at streamlining management while expanding engineering capacity.

Barclays said lithography demand tied to large-scale data-center buildouts remains a core driver, while additional upside could come from consumer AI adoption, humanoid robotics and a more durable memory spending cycle.

Foundry competition was flagged as especially supportive, with Coles pointing to “upside risk from this competition driving increasing investment which should benefit ASML/semicap into 2027.”

Meanwhile, China concerns were also seen as overdone. “These seem unnecessary for 2026 with ASML sensibly setting guidance that implies China down more than 10% yoy to start but recent import strength would suggest demand remains strong,” Coles wrote.

The analyst now expects low-teens revenue growth in 2026 and 2027, driving mid-to-high-teens earnings upgrades, with further upside possible if AI investment and foundry spending accelerate faster than expected.

Mizuho upgrades Applied Materials on rising chip equipment spending

Applied Materials was upgraded to Outperform from Neutral by Mizuho on Wednesday, as the firm pointed to a sharp rebound in semiconductor capital spending and improving demand across foundry and logic customers.

Analyst Vijay Rakesh hiked the price target on the stock to $370 from $275, saying the company is set to benefit from a “significant acceleration” in wafer fab equipment (WFE) spending through 2027.

Mizuho now expects WFE growth of 13% year over year in 2026, followed by another 12% in 2027, which represents a “significant acceleration versus our prior expectations.”

With roughly 65% of revenue tied to foundry and logic customers, Rakesh flagged rising capital outlays from TSMC and improving tool spending at Intel as key drivers of growth.

TSMC’s capital expenditures between 2026 and 2028 are projected to be “significantly higher” than in the 2023–25 period, with 2026 spending alone seen jumping 32% to $54 billion.

Memory demand is also expected to provide support. Rakesh said DRAM tied to high-bandwidth memory (HBM) should remain strong, representing about 30% of Applied Materials’ revenue base.

While China continues to act as a drag, with the company’s China revenue forecast to fall 4% this year, the analyst said the rest of the world — about 70% of sales — is accelerating at a faster pace. He added that AI-driven investment is pushing leading-edge development at nodes below 2 nanometers.

Rakesh said the broader pickup in global WFE spending is creating “strong tailwinds for all WFE suppliers,” underpinning its upgrade and higher estimates for 2026 and 2027.

BofA keeps Snowflake as top software pick, sees AI fueling faster growth

Bank of America (BofA) said Snowflake remains “one of the fastest growing stories in software,” reaffirming its Buy rating and maintaining it as a top pick within infrastructure software.

Analyst Koji Ikeda said the bank views Snowflake as well-positioned to benefit from accelerating enterprise spending on data analytics and AI, given its role as a core data cloud platform.

In a note to clients, Ikeda said the central question for investors is whether Snowflake can sustain product revenue growth in the “high 20%s Y/Y” or potentially “reaccelerate into the 30s.” He argued this outcome is “well within reach,” pointing to a broader product suite, strong AI-related demand and increasing customer usage.

“The blizzard is just starting to form on broad AI adoption, and we think Snowflake will play a foundational role,” he wrote.

BofA expects Snowflake’s growth trajectory to remain “top tier in infrastructure software,” significantly ahead of peers expanding at roughly 10%.

The bank also raised its price target to $275, saying it refreshed its valuation framework “for our updated view on growth, risks, peer multiple compression.”

Snowflake is “fast becoming the king of enterprise data in the cloud,” Ikeda said, pointing to its OLAP data lakehouse architecture, which allows customers to scale compute and storage independently to improve performance and manage costs.

While acknowledging the stock is “not cheap,” with shares trading at a “123% premium” to peers, the analyst said the valuation looks more reasonable on a growth-adjusted basis, where Snowflake trades “at the same multiple.”

Investing.com --A weakness in U.S. dollar will create an unusual earnings swing for global hotel and travel companies in the first quarter with groups that have large non-U.S. revenue exposure to see earnings boost.

The dollar weakness follows a period of strength in early 2025, which has created an outsized foreign-exchange impact in the March quarter that should fade as the year progresses.

The move is a material tailwind for U.S. dollar–reporting companies with high international revenue or US dollar costs that are decoupled from non-US dollar sales.

Bernstein said Booking Holdings, Airbnb and Carnival are the clearest beneficiaries.

Booking stands out, with almost 80% of room nights generated outside the U.S., particularly in Europe, where currencies have strengthened against the dollar.

Airbnb earns about 55% of its revenue outside the U.S., including 33% from Europe and roughly 11% each from Asia-Pacific and Latin America, while Carnival generates about 45% of revenue internationally, largely through its European cruise brands.

For those three companies, Bernstein raised earnings estimates by 2% to 3% to reflect the translation benefit from a weaker dollar. Hilton, Marriott, IHG and Royal Caribbean are also expected to see some uplift, though the impact is less material given their lower non-US exposure.

The losers from dollar weakness are more idiosyncratic. Accor faces pressure despite limited U.S. room exposure, as many of its high-end hotels in the Middle East and Africa charge customers in dollars while reporting earnings in euros.

Bernstein estimates about 35% of Accor’s EBITDA is exposed to the dollar, creating a headwind when the currency weakens.

Investing.com -- Several themes are set to shape the U.S. media landscape in 2026, with companies that combine global reach and exposure to growth areas such as sports and theme parks best positioned to benefit, according to UBS.

The bank said it continues to favor companies with the scale to compete in a streaming-driven media environment, maintaining Buy ratings on Walt Disney Company (NYSE:DIS) and Netflix (NASDAQ:NFLX). UBS pointed to Disney’s accelerating growth, led by improving streaming profitability and continued momentum in its parks business,.

Netflix remains well positioned “deal or no deal,” UBS analysts said, referring to the potential outcomes around Warner Bros Discovery (NASDAQ:WBD), with sentiment expected to improve as its growth prospects, monetization opportunities and competitive moat come back into focus.

UBS also reiterated Buy ratings on Fox (NASDAQ:FOX) and TKO Group (NYSE:TKO). The analysts highlighted Fox’s strong positioning in linear television through its sports and news focus, alongside cyclical tailwinds in 2026 from the World Cup and U.S. midterm elections.

TKO, meanwhile, was backed by rising cash generation from new media rights agreements, as well as additional monetization through site fees and partnership revenues.

A central focus is the outcome of competing bids involving Warner Bros Discovery, which the bank expects to come into clearer view in the coming months as the direct-to-consumer (DTC) market continues to rationalize around a handful of global players.

A Warner Bros combination with Netflix would create “a supercharged content offering, providing an immediate jolt to engagement and long-term monetization upside,” UBS analysts led by John Hodulik said, as deeper libraries and broader distribution lift viewership and pricing power over time.

That outcome would likely pressure Paramount Skydance (NASDAQ:PSKY) shares, “as investors value the company based on its current asset mix and wonder what comes next,” the analysts added.

Meanwhile, a Paramount-Warner Bros deal would give the group the scale needed to “become a viable global streaming player,” UBS said, while also unlocking substantial cost savings. Management is targeting “$6B+ in cost savings or 11% of combined opex,” the bank noted, a level it views as meaningfully higher than in prior media mergers.

The analysts warned that legacy television would still drive roughly two-thirds of EBITDA for the combined company, though the transaction “may support a higher multiple if the value of building a scaled global streaming player outweighs declines in the legacy TV business.”

They also said further consolidation should support industry fundamentals over time, as the sector rationalizes around a few globally scaled services, enhancing pricing power and potentially lowering churn.

In the near term, UBS expects continued improvement in DTC profitability driven by price increases, spending cuts and a return to third-party content licensing, though progress will vary across companies.

Beyond M&A, UBS flagged the possibility of an early renegotiation of NFL media rights as a potential overhang for parts of the sector. Press reports suggest the league could revisit its current deals ahead of the 2029 opt-out, which would place the greatest pressure on networks with heavier sports exposure, while more diversified groups would be relatively insulated.

While historical fee increases have varied, the sheer size of NFL rights could limit the percentage step-up compared with more recent sports deals.

On advertising, the bank expects pressure in linear TV to persist even as major cyclical events provide a boost in 2026. The analysts said “core linear TV advertising revenues fell just <5% in 2025” and their bottom-up forecasts point to a similar decline this year.

The Winter Olympics, FIFA World Cup hosted in the U.S., and midterm elections should lift reported spending, though analysts cautioned that these events also crowd out demand for other programming.

Sports and news-heavy networks are again expected to outperform, with analysts flagging that “the bifurcation in advertising trends between network groups with high exposure to sports/news vs. greater general entertainment exposure continues to widen with each year.”

Meanwhile, cord cutting has slowed modestly. UBS projects that subscriber declines moderated to 5.4% in 2025 from 6.8% the prior year, helped by slimmer and more flexible video packages.

Even so, the bank continues to model roughly a 4% decline in industry affiliate revenues in 2026, with relative resilience at companies combining strong sports portfolios with growing streaming platforms.

Investing.com -- British aerospace tech company Vertical Aerospace Ltd (NYSE:EVTL) launched its U.S. tour in New York earlier this month, where its new commercial aircraft Valo was put on display. The event, which follows the launch of eVTOL in London in December 2025, marks the next step of the company’s engagement with stakeholders ahead of entry into service following regulatory approval expected in 2028. The next stop on the tour is Miami in February.

Following the New York event, Investing.com caught up with the company’s CEO Stuart Simpson to learn more about what the company has achieved in 2025, key 2026 milestones investors should be watching, funding plans and the road to profitability. 

What does Valo’s New York tour represent for Vertical at this stage of the company’s development, and why is this an important milestone for the business?

The New York event – the first stop on the U.S. Valo tour – marks a major milestone in Vertical’s transition from prototype developer to aerospace manufacturer. This is the first time U.S. investors have had the chance to see why Valo is the best eVTOL on the market in terms of capability, comfort, design and safety.

We’ve had hundreds of people marvel at Valo and its unique design differentiators – such as a segregated pilot cockpit from passengers – integral for safety, pilot training, privacy and comfort. Passengers have the largest cabin in the space – at our New York launch, this was suggested that it was akin to sitting in a Maybach. We have the only luggage hold in the industry with enough space for 70lbs of luggage per person.

The US tour highlights Vertical’s commitment to growing its presence in an incredibly important market and home to key customers and partners, including American Airlines and Bristow, Tier-1 aerospace suppliers like Honeywell, and other experienced operators. Seeing is believing and we’re looking forward to showing Valo in more markets across the U.S. this year.

New York is a natural proving ground given its density, congestion, premium travel demand, and existing heliport network. As part of expanding future US operations, Vertical is working with Bristow and Skyports to explore electric air travel routes in and out of Manhattan, using existing heliport infrastructure such as Downtown Skyport.

These routes are intended to cut multi-hour journeys – like JFK to Manhattan – to just minutes by air.

You’re targeting certification and entry into service in 2028. What are the key milestones between now and then that investors should watch most closely? What are some of the regulatory challenges you might face?

In a nascent industry, it can be difficult for investors to see through the ‘hype,’ but there are certain metrics investors should be looking for – technology, capital efficiency, certification progress, and customer traction – all of which Vertical leads in.

2025 was a year of execution for Vertical. We delivered tangible results and demonstrated meaningful progress in the areas that matter most to long-term value creation. With major technical milestones achieved, new strategic partnerships secured, and the unveiling of Valo, we have entered 2026 focused on scaling execution and translating momentum into sustained commercial success.

This year investors can expect:

• Piloted Transition Flight – the final flight phase. This is the critical de-risk of the technology platform and marks the defining capability of eVTOL aircraft. Successful transition proves the core flight dynamics and is a fundamental technical de-risk. Vertical will be only the second eVTOL OEM to conduct piloted transition flight and the first under the strict regulatory scrutiny mandated in the U.K./EU.
• Build complete of our final prototype, enabling significant public flight demonstrations – particularly in the U.K. – and hybrid-electric flight tests. We will be retrofitting a gas turbine to this prototype and after flying it pure battery-electric, we will fly it hybrid later this year. This will be a meaningful moment for the industry as the first piloted hybrid-electric eVTOL flight.
• Announcements of new partnerships, customers, and suppliers.
• Additional stops on the U.S. Valo Tour, with Miami next at the end of February, then other U.S. cities.

On the regulatory front, it’s important to note that certification is much clearer for Vertical compared to U.S. peers in many thanks to EASA’s / CAA’s defined pathway with SC-VTOL and the rigor of our Permit to Fly flight-test regime. The Permit to Fly regime means it is far more challenging to conduct flight tests in Europe – but effectively front-loads the certification efforts – so Vertical along with our home regulators in the U.K./Europe are well acquainted with our aircraft, how we have designed it, our processes and our people. This will allow a more seamless pathway to certification.

Europe has real pedigree in this space. In fact, EASA has already certified the Pipistrel Velis Electro, the world’s first electric aircraft with a type certificate, and Safran’s electric engine.

While we are still a few years away, we have begun to line up certification partners and work together with regulators to maintain momentum and confidence in our timeline.

For investors concerned about dilution risk amid planned capital raises, especially given steady cash requirements at the company, what does the road to profitability look like?

We are targeting cash breakeven by Q4 2029 and are targeting positive net operating cash flow exceeding $100 million by 2030. This is supported by our leading capital efficiency, which is ingrained into everything we do.

We will achieve piloted transition flight – the critical and final flight test phase – for >$1B less than our peers. We are delivering industry-leading results for industry-leading capital efficiency.

We are targeting a further $700M in additional funding to reach certification towards the end of 2028. As we look ahead, the company is in conversation with strategic investors to support our ramp towards commercialization.

We are not only on track to deliver certification by our timeline, but we are doing so with unmatched capital discipline – creating a faster path to returns for our shareholders.

How ready is the market for Valo? What level of demand do you foresee for the different use cases planned versus alternative modes of transport?

The TAM of both eVTOLs and hybrid electric aircraft is significant – Morgan Stanley reported $1trn by 2040 and $9trn by 2050. This isn’t a race to be first – it’s a deep market that won’t be winner takes all.

We’re positioned to deliver 175 aircraft (eVTOL and hybrid) by 2030, scaling to ~900 aircraft produced annually at scale in 2035, reflecting strong demand and the launch of the hybrid-electric variant.

Particularly with the hybrid-electric variant, we see potential to unlock new markets in logistics, emergency services, and defense where payload, range, and uncrewed capabilities are essential.

Can you tell us a bit about plans to scale the offering down the road once regulatory approval comes through? Will the focus be more on expanding to major hubs across the world beyond the U.K. and U.S., or on scaling services across segments?

Vertical’s growth will be underpinned by three key business lines – sales of Valo (our electric aircraft) and the hybrid-electric variant, as well as battery-as-a-service supporting new and existing customers.

We are the only eVTOL company certifying to the highest global safety standard – the same as commercial airliners – which means we are uniquely positioned to operate globally once certified. Peers certified to lower standards will not be able to operate in higher requirement jurisdictions, such as the EU and U.K. While this path demands more time, data, and discipline, it is the only path that leads to global scale, safe operations, and durable credibility.

This is key to our ability to scale and implies Vertical will have a geographic moat around these higher requirement jurisdictions for the initial years of operation, which supports topline forecasts.

We have the second largest order book in the industry – with 1,500 pre-orders – across a globally diversified end user base and expect Valo to enter into service with our global airline, lessor, and operator customers across Japan, Brazil, U.S., U.K., and more following certification in 2028.

We’re also the only eVTOL program backed by a top-tier aircraft lessor (Avolon) which will diversify our customer base and accelerate global adoption.

Investing.com -- U.S. banks continue to dominate global capital markets, and the gap with their European peers shows little sign of closing, despite recent progress by some lenders on the continent.

Over the past decade, major U.S. investment banks have generated returns on equity of roughly 10%, compared with about 7% for large European peers. The difference has been driven largely by stronger investment banking and trading revenues in the United States, where deeper domestic capital markets, scale advantages and sustained technology investment have reinforced market leadership.

Institutions such as JPMorgan Chase, Goldman Sachs and Morgan Stanley have consolidated their positions across advisory, equity and debt capital markets, and sales and trading.

According to Dealogic data, U.S. banks have occupied the top five global investment banking revenue slots for much of the past decade, underscoring how difficult it has been for non-U.S. firms to compete at scale.

European banks entered that period from a weaker starting point. Many spent years restructuring, de-risking and retrenching from capital-intensive or volatile businesses following the global financial crisis and the euro zone debt turmoil.

Deutsche Bank exited global equities trading in 2019, while HSBC Holdings said in 2025 it would wind down parts of its mergers and acquisitions and equity capital markets operations in Europe and North America.

That retrenchment allowed U.S. banks to expand market share, particularly in global investment banking and equities trading. U.S. institutions now account for more than three-quarters of global equities and fixed-income trading revenues, helped by heavy investment in technology that has sharply reduced costs per trade even as volumes have surged.

European banks have, however, begun to regain ground in selected areas. Since 2019, capital markets revenues at European lenders have grown at similar rates to their U.S. peers, albeit from a much smaller base.

Improved capital positions, stronger earnings and a “higher for longer” interest-rate environment have enabled more focused investment, particularly in regional investment banking franchises across EMEA and parts of Asia.

Even so, consolidation is unlikely to be a silver bullet. While the European Central Bank has encouraged bank mergers, national barriers and limited cross-border synergies make it hard to create a European champion with the scale to rival U.S. giants in global capital markets.

The result is a narrowing of gaps in pockets, not a convergence. European banks may strengthen their positions at home, but U.S. dominance in global capital markets looks set to persist into 2026 and beyond.