By Richard Thompson

Apple’s rating cut at Oppenheimer on weak iPhone sales outlook, muted AI impact

Oppenheimer analysts downgraded Apple (NASDAQ:AAPL) stock earlier this week, from Outperform to Perform, citing a "weaker outlook" for iPhone sales and intensifying competition in China.

The a href=https://www.cryptoire.com>investment bank also removed its $250 price target, pointing to valuation concerns and near-term growth challenges.

Oppenheimer lowered its fiscal 2026 earnings per share estimate by 4% to $7.95, below the consensus of $8.23. The firm now expects Apple’s fiscal year 2026 (FY26) revenue to reach $438 billion, down from its previous forecast of $456 billion.

“Our estimate revisions are primarily driven by lower estimates for iPhone sales in FY25-26,” analysts wrote, reducing their FY25 iPhone shipment growth forecast from 5% to 2% while maintaining a 2% outlook for FY26.

Apple’s declining market share in China is a key reason for the downgrade. According to Canalys, iPhone shipments in the country fell 25% in Q4 and 17% for the full year 2024.

"This resulted in a year-to-year market share decline from 19% to 15%," Oppenheimer analysts said, adding that local Android competitors will likely limit Apple's expansion in the region.

The firm is also skeptical about Apple's ability to drive an AI-driven upgrade cycle. “Given the gradual rollout of Apple Intelligence, lack of gen AI 'killer apps' for consumers, and rapid improvement of other gen AI models' capabilities, we expect a slower-than-expected iPhone replacement cycle leading into FY26.”

At 29.2 times next-twelve-month earnings—well above its 10-year average of 20.4x—Apple’s valuation leaves "little upside" at current levels, making it difficult for Oppenheimer to justify a premium rating. Benchmark upgrades Meta stock on solid outlook

Meanwhile, Benchmark analysts raised their rating of Meta Platforms Inc (NASDAQ:META) stock to Buy on Thursday, pointing to a strong 2025 outlook for its core business and the potential for lower long-term capital intensity. The firm also hiked its price target to $820 amid improving ad pricing, rising user engagement, and continued AI investments.

“We also believe 1Q revenue and opex guidance --reflecting a 3-pt. FX headwind, tougher y/y leap day/political comps, and net R&D headcount -- sets a conservative ’25E bar,” Benchmark analysts said.

Despite short-term headwinds, the firm expects Meta’s US ad market share to grow to 24.3% in 2025, though still below its pre-pandemic peak of 27%. AI-driven efficiencies are a key factor in the bullish view, with Meta developing AI engineering agents that can take on coding and problem-solving tasks at a mid-level engineer’s capability.

“We are intrigued with the beginning development of AI engineering agents that can code and problem-solve like ‘a good mid-level engineer’,” the analysts added.

Benchmark also noted Meta is studying DeepSeek’s GPU inference capacity optimizations, which could lead to a more efficient spending trajectory beyond its planned 2-gigawatt data center expansion.

For Q1, the firm trimmed its revenue forecast by 1% due to currency headwinds but still expects sequential acceleration in constant currency terms. It lifted its 2025 revenue estimate by 3% to $190.9 billion, while keeping operating expenses at the lower end of Meta’s $114-$117 billion guidance.

Benchmark sees Meta’s AI infrastructure investments and ad business strength as key growth drivers for 2025 and beyond. DeepSeek’s AI impact on Tesla ‘neutral at worst’, says Piper Sandler

Piper Sandler analysts dismissed concerns about DeepSeek’s AI advancements affecting Tesla Inc (NASDAQ:TSLA), concluding the impact is "neutral at worst."

In a research note published this week, the investment firm suggested that DeepSeek’s ability to develop high-performing AI models with lower capital expenditures could actually work in Tesla’s favor.

"As a consumer of GPUs (a spender of capex), Tesla may actually benefit from this trend," the analysts said.

Piper Sandler emphasized that Tesla’s AI strategy differs fundamentally from DeepSeek’s.

"Tesla is pursuing a different kind of artificial intelligence. Instead of using the Internet as a trove of Test-Based data to train Chatbots, Tesla is using Vehicles as a trove of Camera-Based data to train Robots," its analysts clarified.

Tesla’s competitive advantage lies in its vehicle fleet, designed specifically to collect data for Full Self-Driving technology. Piper Sandler explained that rivals would need similar manufacturing infrastructure and workforce expertise to match Tesla’s data collection capabilities.

“In this regard, we think Chinese auto companies are laggards. Xiaomi’s CEO has stated his company is perhaps 5-10 years behind Tesla,” the analysts continued

They believe Tesla’s focus on camera-based AI and its lead in FSD development position it well in its niche.

Piper Sandler maintained its Overweight rating and $500 price target on Tesla shares. ‘Nvidia will come for them:’ Melius Research downgrades AMD

Earlier this week, Melius Research downgraded Advanced Micro Devices Inc (NASDAQ:AMD) stock to Hold from Buy on Tuesday, citing long-term challenges in the x86 server and PC markets. The firm also lowered its price target to $129 from $160, raising concerns about rising competition from NVIDIA's (NASDAQ:NVDA) Arm-based CPUs.

“We think Nvidia is going to increasingly ‘come for them’ in both markets with their Arm-based CPUs that are optimized for ‘accelerated PCs’,” Melius analysts led by Ben Reitzes wrote.

Melius analysts warned that custom CPUs and Nvidia’s offerings could further erode AMD’s share of the x86 server market, despite the current success of its Turin chip. They also cautioned that major cloud providers, including AWS with its Graviton processors, may increasingly shift toward in-house CPU solutions, adding pressure on AMD.

Melius adjusted its growth outlook for AMD’s PC CPU business, now expecting only 3% revenue growth by 2027, down from a previous estimate of 9%, reflecting concerns over Nvidia’s ability to capture a larger portion of the market.

In the GPU segment, analysts see AMD’s MI300X losing momentum. They cut their 2025 revenue projection to $7 billion, down from the previous estimate of $10 billion.

“Checks indicate AMD's MI300x GPUs are seeing some growing pains from the market participants around the ROCm software stack and a market that is acutely focused on the ramp of Nvidia's Blackwell,” Melius’s team explained.

Looking ahead, Melius sees AMD’s success hinging on the MI350X, expected in late 2025, but cautions that Nvidia’s upcoming Blackwell Ultra, due in Q4 202*, could shift the competitive landscape further.

To reflect these risks, the firm cut its EPS, revenue, and operating margin estimates for AMD for 2025, 2026, and 2027. DeepSeek is ‘a minimal threat to AI revolution:’ Wedbush’s Ives

Wedbush analyst Dan Ives downplayed concerns over DeepSeek’s recent AI model, calling the market sell-off a “golden buying opportunity.” In a note, Ives described the Chinese firm’s language model as impressive but a “minimal threat” to the AI revolution dominated by US tech giants.

DeepSeek, a Chinese private tech company, recently launched an open-source LLM that rivals OpenAI’s ChatGPT and Meta’s Llama 3.1.

The app quickly rose to the top of Apple’s App Store, sparking concerns over China’s AI progress despite US chip restrictions. However, Ives noted that questions remain about how DeepSeek circumvented these restrictions and what chips were ultimately used.

Despite the attention, Ives sees DeepSeek as far behind US companies in AI infrastructure and enterprise applications.

“Mag 7 and US tech is focused on the AGI endgame with all the infrastructure and ecosystem that China and especially DeepSeek cannot come close to,” he said.

The analyst pointed to global enterprise AI, robotics, and autonomous systems as major investment drivers, with $2 trillion in capital expenditures expected over the next three years.

He also dismissed speculation that DeepSeek could gain traction among large enterprises, stressing that “no US Global 2000 company is going to use a Chinese start-up DeepSeek to launch their AI infrastructure and use cases.”

Ives reaffirmed his bullish stance on Nvidia, Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and other US tech giants, arguing that DeepSeek’s emergence might even push hyperscalers to accelerate spending. The analyst sees the recent market dip as another opportunity to own leading AI stocks.

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