1. Rosenblatt Downgrades Apple Amid AI Concerns
Rosenblatt Securities downgraded Apple (NASDAQ: AAPL) from Buy to Neutral, with a revised price target of $217 (down from $263). The downgrade stems from concerns over a lack of an AI-driven jump in iPhone sales, despite the company’s solid performance in Q2 2025. Analyst Barton Crockett noted that for Apple’s stock to significantly outperform, there needs to be an acceleration in iPhone sales driven by AI—something the company hasn’t achieved.
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Apple’s Q2 2025 Results: Revenue of $95.4 billion, a 5.1% YoY increase, with iPhone sales rising by 2%.
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Production Shifts: iPhone production is increasingly moving to India, while other products are being manufactured in Vietnam.
2. Seaport Research Partners Downgrades Nvidia
Seaport Research Partners initiated a rare Sell rating for Nvidia (NASDAQ: NVDA) with a $100 price target. Despite being a major beneficiary of the AI boom, analysts see significant risks, including stretched valuations and challenges related to AI deployments. With rising competition from hyperscalers and internal Nvidia alternatives, Seaport anticipates slowing AI budgets and a potential underperformance relative to peers.
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Challenges: Deployment complexities, competition, and uncertain returns on AI investments.
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Key Risk: Slower-than-expected AI budget growth in 2026.
3. Morgan Stanley Reinstates TSMC as Top Pick
Morgan Stanley reinstated Taiwan Semiconductor Manufacturing Company (NYSE: TSM) as a top pick, citing a rebound in confidence driven by increasing AI capital expenditures and reduced risks surrounding its previous concerns. TSMC is expected to benefit from stronger demand for advanced packaging technology, particularly from Meta and Microsoft.
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Positive Signals: Meta’s $7 billion increase in 2025 capex outlook, Microsoft’s spending on server kits.
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Taiwan’s Role: TSMC’s involvement in producing critical components for AI hardware is expected to grow.
4. JPMorgan Upgrades Western Digital
JPMorgan upgraded Western Digital (NASDAQ: WDC) to Overweight, citing strong earnings growth driven by AI demand. The company’s focus on advanced hard drives for cloud and data centers has led to robust demand. Western Digital’s continued progress in high-capacity HDDs and its ramp-up of HAMR technology are further positives.
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Q1 Earnings: Stronger-than-expected results and an optimistic outlook for the June quarter.
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Product Innovations: Increased production of 26TB and 32TB drives, expected to exceed 1 million units in the next quarter.
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