5 big analyst AI moves: JPM downgrades Meta; Micron gets a fresh Street-high PT

Vahid Karaahmetovic Sun, May 3, 2026 at 5:30 AM EDT 7 min read **

• NVDA
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• ADBE

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

This could be the next re-rating catalyst for Nvidia stock, BofA says**

Ramping up shareholder returns could be the next re-rating catalyst for Nvidia, Bank of America analysts said this week, arguing that a more aggressive capital return program could broaden the chipmaker’s investor base and help close a valuation gap they see as unwarranted.

"Increased cash returns could signal sustainability, widen the shareholder base, and help narrow the valuation gap," wrote analysts led by Vivek Arya.

Despite being the S&P 500’s largest company by market cap at roughly $5.08 trillion, Nvidia trades at nearly a 50% discount to its Magnificent Seven peers on a price-to-earnings basis — 26x and 19x 2026 and 2027 estimates, respectively, against a peer average of 49x and 41.5x.

The gap is wider still on a free cash flow (FCF) basis. BofA estimates Nvidia will generate over $400 billion in FCF across 2026 and 2027 combined, roughly equivalent to Apple and Microsoft combined, yet trades at about a 30% lower market cap-to-FCF multiple than those two companies.

Contributing to this, the analysts argue, is Nvidia’s near-zero dividend yield of 0.02%, which has effectively kept the stock out of income-oriented portfolios.

"Based on equity income funds, NVDA is owned by only 16% of funds while tech peers are owned (depending on market cap but likely also dividend yield) by an average of 32% of funds (range of 9% to 57%)," they noted. "The peer group currently generates an average 0.89% dividend yield versus NVDA’s token 0.02% yield."

BofA argues Nvidia could lift its yield toward 0.5% to 1%, in line with Apple’s 0.4% and Microsoft’s 0.8%, at a cost of just $26 billion to $51 billion, or 15% to 30% of projected 2026 free cash flow.

Over the past three years, Nvidia has returned just 47% of free cash flow through dividends and buybacks, well below the roughly 80% peer average and its own historical rate of 82% from 2013 to 2022.

Goldman stands pat on Microsoft after earnings, sees turning point for lagging stock

Goldman Sachs is standing by Microsoft after its fiscal third-quarter print, reiterating a Buy rating and $610 twelve-month price target.

Microsoft posted third-quarter revenue of $82.9 billion, up 18% year over year and 2% above Street estimates. Non-GAAP earnings per share of $4.27, up 23% year over year, came in 5% ahead of consensus.

Analyst Gabriela Borges framed the quarter as a potential inflection point for a stock that has trailed its peers. On Azure, Goldman highlighted guidance for 39% to 40% constant-currency growth in the fiscal fourth quarter, with modest acceleration expected in the first half of fiscal 2027.

** Story Continues Capital expenditure guidance was notably aggressive. Microsoft projected $190 billion in capex for calendar year 2026, implying second-half spending of roughly $120 billion — a roughly 45% step-up versus the Street’s $82 billion estimate.

Borges also flagged Copilot momentum as a constructive signal, with Microsoft disclosing 20 million seats and the fastest quarter-over-quarter net additions since the product launched. He additionally pointed to internal silicon efficiency gains, including a 67% improvement in GPU efficiency for transcription and up to a 260% gain for image generation.

"We are constructive on Microsoft’s positioning in the AI ecosystem and see a catalyst-rich path in 2H," Borges wrote. "We see this quarter as a meaningful first step in reversing the stock’s multi-quarter period of underperformance."

JPMorgan cuts Meta to Neutral on AI spending risks**

JPMorgan has downgraded Meta Platforms from Overweight to Neutral and trimmed its price target to $725 from $825, pointing to mounting infrastructure costs and limited visibility into the company’s AI product roadmap.

Analyst Doug Anmuth acknowledged Meta’s recent top-line momentum but questioned whether its heavy AI outlays will generate adequate long-term returns.

"While we’re encouraged by META’s +33% Y/Y revenue growth which has been supported by AI-driven ad stack optimizations, accelerating impression growth, & engagement gains, we believe full-stack AI competition is intensifying and Meta has a more challenging path to returns on heavy AI capex beyond advertising," he wrote.

The analyst pointed to Google and Amazon as better-placed competitors, citing both companies’ deeper enterprise integrations and clearer multi-year return profiles on AI capital spending.

Meta recently lifted its 2026 capital expenditure guidance by $10 billion, to a range of $125 billion to $145 billion. JPMorgan now projects the company’s capex will climb 42% to $202 billion in 2027, resulting in negative free cash flow of $4 billion in 2026 and $24 billion in 2027.

Anmuth also flagged a cluster of near-term headwinds: tougher year-over-year comparisons, exposure to Middle East conflict, European regulatory implementation and foreign exchange pressure.

"For now, we’re moving to Neutral-rated & believe shares could remain pressured as investors look for greater clarity on agentic products and how Muse models will help drive incremental revenue beyond advertising," he added.

D.A. Davidson starts Micron at Buy with Street-high $1,000 target

Earlier in the week, D.A. Davidson initiated coverage of Micron Technology with a Buy rating and a $1,000 price target — the highest on Wall Street — noting that AI is reshaping the memory industry in ways the market has yet to fully price in.

"We believe artificial intelligence is creating a longer-than-usual memory cycle as compute deployment and demand generation exist in a positive feedback loop, creating a structurally higher ceiling for memory pricing and demand," analyst Gil Luria wrote.

Luria’s core argument is that prior memory cycles were constrained by a fixed demand ceiling — capacity additions eventually overtook demand, margins compressed, and the cycle turned. AI has disrupted that pattern. Each new compute deployment, he argues, "unlocks new use cases, creating incremental demand that didn’t exist before the infrastructure was built."

The analyst also points to the emergence of multi-year strategic customer agreements as a structural shift. Micron became the first memory supplier to announce a five-year supply deal in March; Samsung and SK Hynix are said to be in similar discussions with hyperscaler customers. The move away from one-year contracts, Luria argues, meaningfully improves demand visibility and pricing stability across the industry.

"We are not arguing that there isn’t a cycle, just that the duration and extent of the cycle may not be priced in properly," he wrote.

On the product side, Luria highlights Micron’s node leadership — four consecutive generations in DRAM, three in NAND — as a compounding cost advantage. High-bandwidth memory is seen as the central growth driver, with Micron’s HBM market share expanding from roughly 5% in 2024 to approximately 21% by the second quarter of 2025, surpassing Samsung to become the second-largest supplier.

"The market is still framing the cycle through the lens of prior downturns, which appears to underestimate the demand environment, especially relative to the rest of the semi complex," Luria said. "Combined with Micron’s node leadership and what we see as a long duration earnings power story, we see meaningful upside to shares."

Mizuho upgrades CrowdStrike, downgrades Adobe in split call on AI positioning

In other rating changes this week, Mizuho analyst Gregg Moskowitz upgraded CrowdStrike to Outperform while cutting Adobe to Neutral, reflecting diverging views on how each company is navigating the AI landscape.

On CrowdStrike, Mizuho raised its price target to $520 from $490, citing healthy platform demand and a favorable risk/reward at current levels. Moskowitz pointed to Falcon Flex, hyperscaler marketplaces and AI security initiatives as key growth drivers, adding that he "fully expects CRWD to capitalize on AI security" and believes the company "arguably has the strongest set of offerings in the space."

He also flagged Project Glasswing as a potential catalyst, seeing "a legitimate possibility that Project Glasswing will catalyze good incremental business activity for CRWD over time." With shares trading at roughly 14x CY27 ARR, Moskowitz called the valuation "more reasonable" and the risk/reward favorable.

On Adobe, Mizuho cut its price target to $270 from $315, pointing to intensifying competition in the prosumer and SMB segments and "no clear catalyst for the stock." Moskowitz warned of a "risk of margin erosion" and now sees Adobe’s organic revenue and ARR CAGR over the next two to three years as "high-single-digits at best."

He acknowledged the company had "wrongly held off from downgrading given what appeared to be a compelling valuation."

"We see a generally balanced risk/reward profile on ADBE from here," he concluded.

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