Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
Alphabet is best positioned for next phase of AI: BofA Alphabet is the strongest-positioned stock for the next phase of artificial intelligence as investor attention shifts away from pure capital spending intensity and toward monetization, returns and durable competitive advantages, according to Bank of America.
BofA analysts said sentiment around AI capabilities, incremental revenues and capex returns will remain a key driver of mega-cap internet stocks through 2026.
While AI-related spending continues to rise sharply, the team noted that leading hyperscalers are generating sufficient operating cash flow to fund investment internally, while selectively accessing debt markets to preserve balance-sheet flexibility.
Against that backdrop, Alphabet stands out as “best positioned across all segments,” analysts Justin Post and Nitin Bansal said in a note this week, citing the company’s depth across foundational models, custom silicon, enterprise cloud and consumer distribution.
This breadth becomes increasingly important as the AI trade matures and investors demand clearer evidence of sustainable returns, they added. BofA estimates that AI could unlock more than $1 trillion in incremental revenue opportunities over the next five years.
Alphabet’s relative strength, analysts said, rests on what it describes as four structural moats likely to define long-term AI leadership: frontier model leadership, consumer distribution, enterprise distribution and custom silicon.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Google parent is the only company BofA sees with strong relative positioning across all four areas. That view is underpinned by ongoing Gemini model development, rising demand for Tensor processing units (TPUs), a scaled and growing enterprise cloud business, and multiple large consumer platforms that support both AI training and monetization.
Morgan Stanley lifts Apple target on earnings power Also this week, Morgan Stanley raised its price target on Apple to $315 from $305 in a new 2026 outlook on the North American IT hardware sector, keeping the stock rated Overweight and reaffirming it as one of the bank’s highest-conviction ideas for the year ahead.
The Wall Street firm said the higher target reflects an increase in Apple’s longer-term earnings power, particularly in fiscal 2027 (FY27), even as rising memory costs emerge as a more visible headwind across the hardware landscape. The update comes as analysts reassess margin dynamics tied to component inflation, especially DRAM.
Analyst Erik Woodring lifted his FY27 earnings per share forecast for Apple to $9.83 from $9.55, citing stronger revenue assumptions that outweigh the expected margin pressure.
While the earnings outlook was revised higher, Woodring said he cut FY27 product gross margin assumptions by around 160 basis points to reflect higher memory input costs.
Apple’s earnings resilience is underpinned by iPhone volumes and pricing, which Woodring said “more than offset” the impact from rising component expenses.
Apple remains one of the few hardware names where demand elasticity is expected to stay relatively contained as prices move higher, supporting both revenue and earnings visibility, he added.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Within Morgan Stanley’s broader sector view, Apple was named to the firm’s “core 5 Overweights” for 2026, alongside Western Digital, Seagate Technology, TD Synnex and Teradata, highlighting its preferred positioning as the bank looks into the year ahead.
AI valuation fears top global market risks for 2026, survey shows AI-linked valuation risk has emerged as the dominant threat to market stability in 2026, according to Deutsche Bank’s latest global markets survey, which polled 440 investors and market participants worldwide in mid-December.
In the survey, 57% of respondents identified a sharp selloff in technology stocks, driven by fading enthusiasm around AI, as the biggest risk facing markets next year. That makes AI-related valuation concerns far more prominent than any other macro or financial risk flagged by investors.
“We’ve never had such a big leader in the biggest risks stake for the year-ahead,” Deutsche Bank strategist Jim Reid said in the report. “AI/tech bubble risk towers over everything else.”
The distance between AI risk and other perceived threats is notable. The second-most cited concern, mentioned by 27% of respondents, was the possibility that a new Federal Reserve chair could pursue aggressive interest rate cuts, potentially destabilizing markets.
Worries about stress in private capital markets followed at 22%, while 21% of respondents pointed to the risk that bond yields could rise more than expected. Sticky inflation forcing central banks into surprise rate hikes ranked lower, selected by 15% of participants.
