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

InvestingPro subscribers always get first dibs on market-moving AI analyst comments. Upgrade today!

MS: ‘We would be aggressive buyers on any pullbacks’ in Microsoft shares

Morgan Stanley reiterated as its “Top Pick” among large-cap software names, lifting its price target to $650 from $625 after what it described as a “powerful start“ to fiscal 2026 (FY26).

Analyst Keith Weiss said the bank would “be aggressive buyers on any pullbacks,” citing accelerating growth, resilient margins, and expanding AI demand. He noted that “commercial bookings grew 111% year-on-year and current remaining performance obligations (cRPO) accelerated to 35% year-on-year.”

Microsoft’s fiscal first-quarter results “exceeded consensus across all three business segments,” delivering roughly a 3% revenue beat and showcasing “strong demand trends.”

Azure revenue climbed 39% in constant currency — one percentage point below buyside expectations — but still reflected “growth that is accelerating,” Weiss said. “A focus on Azure growth 1 point shy of expectations in a supply-constrained environment seems to miss the point – growth is accelerating,“ he wrote.

Operating margins expanded by 230 basis points year-on-year and came in “230 basis points ahead of consensus,” as the company balanced a higher cloud mix with “strong operational controls.”

CFO Amy Hood said demand “again exceeded supply across workloads even as we brought more capacity online.” Morgan Stanley expects supply constraints to continue through fiscal 2026, with capital expenditures projected to rise further from last year’s 58% increase.

Weiss said Microsoft’s “durability of top-line demand and the potential for further margin expansion” remain underappreciated, reaffirming his view of the company as “the long-term GenAI winner.”

Jefferies ups Apple to Hold but warns of muted long-term growth

This week, Jefferies upgraded to Hold from Underperform, citing a stronger December-quarter outlook and continued resilience in services, though it warned that the longer-term picture remains subdued.

“Apple’s September-quarter revenue grew 7.9% year over year, 6% above our estimate and 1% above consensus,” analyst Edison Lee highlighted.

Growth “was mainly driven by 15% service revenue growth,” he said, while product sales rose 5.4%, led by a 6% increase in iPhone revenue. Mac revenue climbed 13%, while China stayed the weakest market, down about 4% from a year earlier amid supply constraints for the iPhone 17.

Lee pointed out that Apple’s “guidance of 10%-12% revenue growth in the December quarter is the first double-digit growth period“ since the secnod quarter of FY22, implying around 10% growth in product sales and 13%-14% in services.

Gross margin is expected between 47% and 48%, including a $1.4 billion tariff cost.

Lee added that he expects “China revenue growth in 1QFY26 will likely turn positive,” supported by faster iPhone shipments and solid demand for the base iPhone 17 model, helped by “aggressive pricing and government subsidies.”

However, he cautioned that “earnings upgrade is very limited” and said 2026 growth will be constrained by “a $100 price hike assumed for iPhone 18,” higher upgrade rates from iPhone 17, and “a less favorable product mix.”

“Stock remains expensive but will likely remain so given the hope for iPhone 18 (especially foldable),” Lee said.

Oppenheimer cuts Meta to Perform, flags AI spending risks and rising costs

In another notable move this week, Oppenheimer downgraded to Perform from Outperform, pointing to increasing uncertainty surrounding the company’s heavy spending on AI.

Analyst Jason Helfstein said Meta’s “significant investment in Superintelligence despite unknown revenue opportunity mirrors 2021/2022 Metaverse spending,” drawing parallels to an earlier period of high-cost initiatives that offered limited short-term payoff.

He noted that Meta’s implied fourth-quarter operating and capital expenditures were both roughly 7% above Street estimates. The company also guided for fiscal 2026 capex growth to be “notably larger than 2025” and for expenses to rise “significantly faster” than this year’s 23% increase — both forecasts described as “ahead of Street.”

While Meta delivered strong third-quarter ad trends, with ex-FX advertising revenue up 25% from a year earlier versus 21% in the prior quarter and 4% above consensus, Helfstein questioned “the rationale for guidance of 600bps deceleration in 4Q.”

The analyst warned that “investors will struggle to rationalize the PE until there is visibility into 2027,” saying Meta’s “aggressive revenue growth is offset by high spending.”

He also compared Meta with , emphasizing that the latter has that “predictable earnings at a reasonable PE.”

“Both companies [are] trading at the same PE (21x 2027E), and Search could outgrow META at some point in 2026,” Helfstein added.

BofA lifts Tesla target on physical AI leadership, but says valuation is stretched

Bank of America raised its price objective on to $471 from $341 while keeping a Neutral rating, saying the company remains the clear leader in “physical AI” but cautioning that its valuation remains demanding.

The new target stems from a sum-of-the-parts (SOTP) model that attributes about 45% of Tesla’s total value to the robotaxi business, 19% to Optimus, 17% to Full Self Driving, 12% to core automotive, and 6% to energy generation and storage.

The team led by Federico Merendi said the higher valuation reflects “a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets.”

BofA revised its forecasts to include stronger energy margins, lower-priced Model 3 and Y versions, and initial Robotaxi contributions, while also lifting operating expenses to capture growth investments. It now expects 2026 operating expenses of $13.2 billion, up 24% from prior estimates.

“We continue to see TSLA as the company with the largest advantage in terms of autonomous driving initiatives and physical AI applications currently in the marketplace. However, we acknowledge that there are challenges in the near term and the current valuation is stretched,” the analysts wrote.

Tesla’s third-quarter revenue rose 12% year over year to $28.1 billion, topping estimates on record deliveries of 497,099 vehicles. Automotive margins narrowed to 17% amid higher costs and tariffs, while the energy division posted strong 31.4% gross margins.

Operating expenses climbed 44% year on year, driven by a 57% surge in AI and R&D spending.

Analysts said near-term pressure persists in Tesla’s North American auto segment following the expiration of Inflation Reduction Act incentives, echoing Elon Musk’s warning of “a few rough quarters.”

They remain more upbeat on the energy and robotaxi segments, noting Tesla’s Austin service area has tripled and the company plans to launch Robotaxi in up to ten metro areas by year-end.

“Tesla’s vision-based approach has the potential to allow for much quicker scaling of Robotaxi vs. competitors,” they wrote.

Goldman Sachs upgrades Roblox to Buy, sees nearly 60% upside

Goldman Sachs upgraded Roblox Corp (NYSE:RBLX) to Buy from Neutral, setting a 12-month price target of $180 — nearly 60% above current levels — citing “strong platform momentum” and a clear path toward “long-term revenue compounding and margin trajectory.”

Analyst Eric Sheridan said in a note that Roblox’s third-quarter results showed “strength in bookings, revenue and daily active user (DAU) growth,” with management expressing “a continued and rising sense of optimism surrounding the long-term scaling of the platform.”

While near-term margin guidance “disappointed relative to Street expectations,” Sheridan said higher investment in “AI, technical infrastructure and trust/safety initiatives” should strengthen Roblox’s competitive positioning.

The analyst pointed to “sustained momentum in terms of the growth of creators/developers” and “a widening out of the array of content available to users,” which it said would support ongoing audience expansion.

He also flagged progress in discovery and engagement, noting that “changes made to Roblox’s display of experiences on the home page… have begun to drive a viral content flywheel.”

Monetization trends were also improving, Sheridan said, with “regionalized pricing” boosting payer conversion and “advertising continuing to scale on the platform.” In the third quarter, 18,000 creators used traffic-driving ads, up 27% from the prior quarter.

“We increasingly see more of a sustained upside node… as the company increasingly demonstrates the hallmarks of a consumer Internet/Media platform building on virality, content creation, distribution and monetization,” he wrote, likening Roblox’s evolution to “the scaling of YouTube over the last 10+ years.”