Key Points:
- UBS reinstated chipmaker ASML as its top European semiconductor pick, raising its price target to €1,900 from €1,600.
- Evercore ISI flagged hardware giant Dell as its top pick ahead of its highly anticipated earnings release.
- Bank of America downgraded Salesforce to Underperform, warning of a structural software reset driven by AI automation.
- Morgan Stanley named Nokia its top pick for AI data center optical networking, raising its target price to €14.
Global investment banks are rapidly adjusting their portfolios as the artificial intelligence (AI) market shifts. Analysts are recognizing that the first wave of pure “compute” hype is evolving, highlighting deep hardware connectivity, memory density, and structural software resets as key drivers. As a result, Wall Street’s top financial institutions recently made several major upgrades and rating changes for leading technology stocks.
UBS reinstated the Dutch lithography giant ASML as its top pick in the European semiconductor sector, raising its price target to €1,900 from €1,600 and lifting its future earnings estimates well above consensus. Since ASML noticeably lagged behind its US peers this year, trading at just a 6% premium compared to its 10-year historical average premium of 84%, UBS views this underperformance as an attractive risk-reward opportunity for investors.
The Swiss bank dismissed fears of lithography bottlenecks, noting that ASML’s 2027 capacity can support more than 50% year-on-year growth in leading-edge wafer output, far exceeding projected demand growth of 25-30%. Furthermore, UBS highlighted ASML’s massive memory exposure. The firm expects to have roughly 30-35% of its revenue tied to memory by 2026, higher than its US competitors’. This memory tailwind, alongside the cost-saving potential of next-generation High NA EUV technology, supports a highly bullish case.
On the hardware side, Evercore ISI flagged Dell as its top pick ahead of its highly anticipated earnings release. Evercore argued that AI infrastructure and networking remain the most durable areas of hardware capital expenditure. As hyperscalers, neoclouds, and traditional enterprises continue to invest in campus networking and data center modernization, Dell is well-positioned to beat earnings expectations and potentially raise its full-year revenue guidance.
Beyond server infrastructure, near-term trends in the personal computer market are improving. Industry data from IDC indicates that global PC shipments grew by approximately 3% year-on-year, providing a strong tailwind and raising average selling prices. Evercore also noted that Hewlett Packard Enterprise (HPE) is similarly positioned to benefit from networking upside across its Aruba and Juniper divisions, signaling broad strength across the hardware landscape.
In a surprising move, Morgan Stanley named Nokia its top pick for AI data-center networking exposure, raising its price target on the stock to €14 from €11. The bank argued that Nokia’s transition from a legacy mobile technology firm to a supplier of high-tech optical networking equipment represents a major structural re-rating opportunity. Although its AI and cloud revenues stood at just €1.1 billion in 2025, Morgan Stanley views this low base as a massive runway for exponential growth.
Morgan Stanley analysts highlighted a major guidance upgrade for Nokia’s optical and IP networks unit, with growth projections rising from 10-12% to an impressive 18-20%. The bank’s own models are even more bullish, predicting a 21% growth rate and an operating profit of €3.65 billion by 2028. This rapid transformation is drawing intense investor interest, as Nokia provides a secure, Western-supplied alternative to critical internet infrastructure.
On the software side, Bank of America (BofA) took a bearish stance, reinstating coverage of Salesforce with an Underperform rating and a $160 price target. BofA argued that Salesforce faces a permanent structural reset driven by artificial intelligence, rather than a temporary cyclical slowdown. The bank believes Salesforce is transitioning from a high-growth software platform to a mature cash generator, modeling future annual revenue growth at just 10%—a sharp deceleration from the 18-28% rates achieved during fiscal years 2020 through 2023.
BofA highlighted that as new AI products like Agentforce automate customer service and lead qualification, they reduce the number of human users requiring paid subscriptions. This shift threatens Salesforce’s traditional seat-based licensing model, which has historically driven its revenue growth. Additionally, the company faces encroaching competition above the application layer from rivals such as ServiceNow and Google, leaving Salesforce a saturated system of record rather than a platform capable of incremental monetization.
These major analyst moves demonstrate that the AI investment landscape is undergoing a critical transition. Investors are looking past simple software subscriptions and bottlenecks, focusing instead on deep hardware capacity, memory infrastructure, and data center connectivity. As companies like ASML, Dell, and Nokia adapt to these new infrastructure demands, they are reshaping the future of global technology markets.
