5 big analyst AI moves: Amazon, Salesforce downgraded, Citi starts SMCI coverage

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

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BofA lowers Apple price target on AI delays

Bank of America (BofA) lowered its price target on Apple Inc (NASDAQ:AAPL) to $240 from $250, citing delays in its AI launch and rising supply chain costs amid tariff-related uncertainty.

The bank maintained a Buy rating, supported by “resilient earnings, improving gross margins and strong capital return.”

BofA analysts pointed to delays in the launch of Apple’s AI-enabled Siri as a potential headwind for iPhone upgrade demand.

“Apple’s launch of an AI-enabled Siri has been delayed and can cause a further pushout of iPhone upgrades,” BofA analysts said in a note. The bank trimmed its fiscal 2026 earnings per share (EPS) estimate to $7.82 from $8.20.

Longer-term revenue forecasts were also revised lower, now expected at $440 billion for fiscal 2026, down from $450 billion. BofA attributed the downgrade to “higher costs of navigating a more complex supply chain and for delays in launching an AI-enabled Siri.”

Tariffs added another layer of risk. While some consumers may accelerate purchases to avoid potential levies, BofA warned that the outlook beyond the summer remains uncertain.

“Tariffs create near-term volatility,” the bank’s team wrote. The revised price target reflects a reduced multiple of 29x 2026 earnings, down from 30x, to account for “higher uncertainty around tariffs.”

Still, the bank highlighted some positives on the horizon. A weaker U.S. dollar is expected to be a tailwind and could “help drive upside to revenues and margins starting in the June quarter.”

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Upcoming product launches could also support momentum, with Apple anticipated to introduce a thinner iPhone “Air” in September 2025 and a foldable model the following year.

Raymond James cuts Amazon rating, price target to Street low

Raymond James downgraded Amazon.com Inc (NASDAQ:AMZN) to Outperform from Strong Buy and cut its price target to $195 from $275, the lowest among major brokerages, citing underestimated margin risks and rising investment burdens.

The firm’s analysts said they reassessed Amazon’s investment cycle and concluded that “the Street is underestimating EBIT pressures in 2025-26.”

While positive on the company’s long-term AI potential, they cautioned that “with rising EBIT risk/limited monetization progress, it is more challenging for us to stick with our Strong Buy rating.”

The brokerage pointed to several headwinds, including a tougher macro environment and the impact of new U.S. tariffs, which it expects to weigh on China-linked operations.

Analysts estimate that “~30% of online GMV and ~15% of ads are China-linked,” and see a 200 basis-point hit to gross margins from China-sourced first-party products.

Logistics costs are also under pressure as Amazon builds out its delivery network, especially in rural areas, following UPS’s exit. The company’s efforts to diversify its supply chain and reduce reliance on China are proving capital intensive.

Raymond James lowered its EBIT estimates by $6 billion for 2025 and by $12 billion for 2026, citing weaker trends in advertising and AWS, along with ongoing margin drag from first-party retail.

On AI, the brokerage acknowledged strong momentum. “Monetization: Strongest evidence is multi-$B ARR revenue run-rate growing triple-digit,” but said the gains are “supply-constrained” and require heavy upfront investment.

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It also flagged cost risks from emerging bets like Kuiper and Zoox, which could add $1–2 billion annually if they go commercial.

Raymond James now prefers Meta (NASDAQ:META), Uber (NYSE:UBER), and MercadoLibre (NASDAQ:MELI) over Amazon, citing their more advanced AI monetization and clearer paths to returns.

D.A. Davidson downgrades Salesforce as AI focus weighs on core business

Also this week, D.A. Davidson downgraded Salesforce Inc (NYSE:CRM) to Underperform from Neutral, warning that the company’s growing focus on artificial intelligence is coming at the expense of its core business, which is slowing across multiple fronts.

The brokerage slashed its price target to $200 from $250 and removed Salesforce from its quality stock list, citing weaker performance in legacy segments and acquisitions such as Slack, Tableau, and Mulesoft. Analysts wrote,

“We see this as the year Salesforce completes its transformation from SaaS pioneer to late-stage technology company and perennial share donor,” D.A. Davidson analysts said.

While the company has seen early interest in its AI product Agentforce, the analysts questioned the timing and scale of the shift.

“We believe betting the whole company on this effort may be at the expense of the other 98% of the company’s business,” they said, noting slowing revenue across key divisions and limited customer appetite for new AI tools amid broader IT budget constraints.

Salesforce recently reported a $900 million annual run-rate from AI and data offerings, but Davidson suggested much of that reflects bundled pricing rather than genuine demand. Their customer and employee checks also raised doubts about Agentforce’s maturity and return on investment.

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The brokerage sees downside risk to fiscal 2026 expectations, projecting 5.5% revenue growth compared to the 7.5% consensus. It now values the company at 18x fiscal 2026 EPS, below peers, and expects growth to slow further in non-AI segments.

Citi reinstates Siemens at Buy amid AI automation potential

Citi has reinstated coverage on Siemens (ETR:SIEGn) with a Buy rating and a €245 price target, highlighting the company’s strengthening role in industrial AI and automation.

The bank pointed to Siemens’ expanded software portfolio as a key driver of long-term growth, positioning the company “into a leading position to enable agentic and physical AI in industrial applications.”

While near-term concerns persist due to macro uncertainty tied to tariffs, Citi emphasized the resilience of underlying trends. “We continue to see strong long-term secular tailwinds in both automation and electrification,” the bank’s analysts wrote.

Citi sees Siemens’ €7 billion Digital Industries software portfolio—bolstered by recent deals including Altair and Dotmatics—as a central advantage.

“We see the breadth of the software offering, domain expertise, and installed base of edge devices as consolidating a competitive moat for Siemens,” Citi’s team continued.

The transition toward software and SaaS is expected to support mid-term growth and margin expansion. Citi also called for a full divestiture of Siemens’ 73% stake in Healthineers, suggesting that a spin-off could enhance financial flexibility.

“We think Siemens should fully exit Healthineers,” the analysts said, adding that deconsolidation could lift ROCE to about 25% and cut net debt/EBITDA sharply by fiscal 2026.

Though Citi trimmed its 2026 EPS estimate by roughly 6% due to softer expectations in short-cycle businesses, the Wall Street firm maintained a positive outlook.

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The analysts concluded that “AI-led automation in focus” will remain a dominant theme, with Siemens well-placed to benefit from the next industrial upturn.

Citi initiates SMCI at Neutral, says AI server demand offset by strong competition

In a separate note, Citi initiated coverage on Super Micro Computer (NASDAQ:SMCI) with a Neutral rating and a $39 price target, pointing to strong exposure to AI infrastructure but cautioning that growing competition and structural risks could cap upside.

“Supermicro remains one of the leading players to GPU-as-a-Service cloud providers and enterprises,” Citi analysts wrote.

The company holds an estimated 8% share of AI server revenue, with approximately 70% of its total sales linked to AI demand. Key customers include CoreWeave, xAI, and Tesla (NASDAQ:TSLA).

While the bank acknowledged Supermicro’s notable market share gains—from around 3% to 6% over the past three years—it warned that a more crowded AI server market could weigh on profitability.

“An increasingly competitive AI Server landscape pressuring margins,” the note said, highlighting Dell (NYSE:DELL) as an emerging threat.

Shares currently trade at 9–10x next-twelve-months PE, which Citi sees as justified relative to the 5-year median of 11–12x. The bank attributes the valuation gap to “tariff uncertainty” and rising competitive pressure.

Citi also flagged several financial and operational concerns. These include high customer concentration—with the top three clients accounting for 58% of revenue—lagging free cash flow margins compared to peers, and lingering investor concerns over internal controls following prior delays in financial reporting.

Despite these challenges, Citi remains “constructive on secular AI server spend,” though it tempered expectations due to “broader tariff-related economic concerns that could pose some expansion challenges in the non-hyperscaler + enterprise market.”

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The analysts identified several risks, including revenue volatility tied to GPU supply constraints and macro conditions, as well as the need for capital raises and improved free cash flow performance.

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