1. Apple Warned: GenAI Strategy Now Critical

Apple (NASDAQ:AAPL) is under mounting pressure to present a clear generative AI strategy, according to Needham analyst Laura Martin. In a note published Friday, Martin warned that Apple risks falling further behind competitors in the GenAI space if it doesn’t outline a concrete plan during its upcoming Q3 earnings.

“We do not believe Apple can stay on the sidelines without a clearly articulated GenAI strategy and action plan,” Martin wrote.

She emphasized the growing technological gap between iOS and Android, calling it an “existential risk” for a company so dependent on iPhone sales and related services. Martin also raised concerns about rising costs, speculating Apple may soon announce a multi-billion-dollar licensing agreement with Anthropic or another large language model provider—or increase capital expenditures to build out its own GenAI infrastructure.

Failure to move quickly could also result in the loss of top AI talent to rivals such as Meta (NASDAQ:META), OpenAI, and Anthropic.

Apple shares are down 14% year-to-date, significantly underperforming the S&P 500’s 8% gain. Martin said the underperformance reflects investor frustration with Apple’s slow AI rollout. Unlike peers such as Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), Apple has yet to establish a clear revenue stream from GenAI. Still, its forward P/E remains high at 27.7x, despite slowing growth.

“We believe Apple’s stock could decline once investors fully grasp the level of investment required to catch up with other Big Tech players who adopted GenAI early,” Martin concluded.

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2. Amazon Price Target Raised by BofA on Strong Q2 Outlook, AI Tailwinds

Bank of America raised its price target on Amazon (NASDAQ:AMZN) to $265 from $248 while maintaining a Buy rating, citing strong second-quarter results and strengthening AI-driven growth in Amazon Web Services (AWS).

The bank now projects Q2 revenue of $164 billion, ahead of the $162 billion consensus, and net profit of $17.8 billion—surpassing the Street’s $17.0 billion estimate and Amazon’s own high-end guidance of $17.5 billion.

BofA said this confidence stems from internal credit card data and Bloomberg Second Measure, both of which point to stronger-than-expected retail sales momentum in North America.

International results may also benefit from currency effects. “The euro was up 5% year-over-year and 8% quarter-over-quarter vs. the U.S. dollar, which should help boost international revenue,” analysts noted.

For Q3, BofA expects revenue guidance between $169 billion and $174 billion, and GAAP EBIT guidance between $14.0 billion and $18.0 billion—below the consensus of $19.4 billion. Recent AWS job cuts could help support margins, while ongoing AI demand and backlog growth continue to serve as major tailwinds.

“AWS will be the key stock driver in the second half of 2025,” the bank wrote.

Amazon’s valuation at 13.4x 2026 EV/EBITDA still leaves room for multiple expansion, BofA added.

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3. AMD Upgraded to Buy on Strong Demand for CPUs and GPUs

Erste Group upgraded AMD (NASDAQ:AMD) from Hold to Buy, citing robust demand for high-performance computing in data centers as a major growth catalyst.

Analyst Hans Engel said AMD is well-positioned heading into 2025, with strength expected across both CPUs and GPUs.

“AMD anticipates continued growth in 2025, driven by rising demand for high-performance processors and graphics chips in the data center space,” Engel noted.

He added that operating margins are likely to improve over the medium term, which should accelerate profit growth.

“The stock should continue to rise on the back of these solid growth prospects,” Engel concluded.

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4. ASML Named Top Semicap Pick for 2026 by New Street

New Street Research upgraded ASML (NASDAQ:ASML) to Buy, setting a price target of €790. The firm believes ASML is best positioned within the semiconductor equipment space for long-term outperformance.

While market consensus forecasts just 2% revenue growth for ASML in 2025—well below the 6% to 12% growth range expected for peers—New Street called that view overly cautious. The firm said ASML’s strong exposure to leading-edge wafer fabrication tools gives it a clear competitive edge.

The analysts also noted limited risk of market share loss in China, which should help ASML grow at the high end of its peer group range.

Valuation was another factor supporting the upgrade. ASML shares currently trade at 25x forward earnings, below historical averages and cheaper than peers like KLA. This suggests limited downside risk from further multiple compression.

The €790 price target is based on a 25x multiple of projected 2027 earnings of €31.90 per share.

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5. BCA: AI Will Disrupt Domestic Politics and Global Security

BCA Research warned that artificial intelligence is likely to destabilize both domestic political landscapes and global security dynamics. In a new note, Chief Geopolitical Strategist Matt Gertken cited recent moves by former President Trump to accelerate U.S. AI leadership and pressure the Federal Reserve on policy.

“Artificial intelligence will destabilize domestic politics and international security,” Gertken wrote, warning that rapid AI advances may worsen polarization in the U.S. and deepen mistrust between world powers.

He anticipates increased corporate taxation and “more creative fiscal policy” targeting tech firms as part of the U.S. response. On the global stage, AI-driven military advances may heighten strategic tensions, while faster access to information won’t necessarily lead to better international cooperation.

These developments could raise market volatility and hasten shifts in economic policy, Gertken concluded, with AI acting as a long-term destabilizing force.

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