Truist Securities raised its price target on Meta Platforms to $1,000, while Bank of America double-upgraded Salesforce to Buy, marking a shift in Wall Street sentiment toward AI-enabled software giants. These moves coincide with Barclays downgrading three hardware suppliers, signaling a divergence in how analysts value different segments of the artificial intelligence supply chain.
Youssef Squali at Truist Securities cited early traction for Meta’s Muse AI agent to support the new $1,000 target, up from $763. Squali maintains a Buy rating and projects $28.5 billion in incremental revenue by 2030 from Muse. Meta shares have climbed 21% since the Muse launch on September 8, outpacing the S&P 500’s 2% gain over the same period. Squali expects third-quarter revenue of $63.9 billion, representing a 25% year-over-year increase and the high end of Meta’s $61-64 billion guidance. He forecasts 2027 capital expenditure of $190 billion, a 32% rise from the prior year, slightly below the consensus estimate of $193 billion.
Bank of America analyst Tal Liani reversed a prior bearish stance on Salesforce, arguing that large enterprises are unlikely to replace platforms housing their core business logic and data. Liani raised the price target to $285 from $160 and upgraded the stock from Underperform to Buy. He outlined a four-layer architecture for Salesforce’s AI strategy, including data governance, applications like Sales Cloud, the Agentforce agentic layer, and Slack integration. While acknowledging that AI revenues remain small, Liani noted strong growth in new deal sizes and accelerating Slack performance as positive indicators. The bank raised its subscription and support revenue growth forecasts for fiscal 2028 and 2029 to 10.4% and 10.5%, respectively.
In contrast, Barclays downgraded Dell Technologies, Hewlett Packard Enterprise, and NetApp to Equal Weight from Overweight. Analyst Tim Long stated that valuations have run too far without a corresponding enterprise AI inflection. Long noted that the seven enterprise-exposed stocks in his coverage have risen an average of about 140% this year, trading at roughly 21 times estimated 2027 earnings compared to a five-year average of around 15 times. He cut Dell’s target price to $574 from $603, projecting a deceleration in growth as memory prices normalize.
Barclays strategist Emmanuel Cau warned that the AI trade is entering a more mature phase with increased scrutiny on valuations and earnings clarity. Cau cited hot inflation data and renewed Middle East tensions as factors testing the bank’s equity thesis. He attributed recent weakness in chip stocks to intensifying memory competition and funding concerns after two Asian data center companies delayed IPOs. Cau advised investors to favor companies with proven business models and reasonable valuations, noting that Europe offers useful diversification due to lower AI concentration.
HSBC downgraded Adobe to Hold from Buy, citing risks from a free open-source clone of its Creative Cloud suite. Analyst Stephen Bersey pointed to reports of a firm named ArtCraft releasing an auto-coded clone of Adobe’s software. Bersey cut Adobe’s revenue estimates by about 1% and adjusted earnings estimates by 1-2%. Adobe currently trades at nine times estimated 2027 adjusted earnings, well below the sector median of 20.7 times.