AMD Upgraded on AI Outlook as Analysts Downgrade SAP and Intuit

Wall Street analysts issued a series of significant rating changes across the artificial intelligence landscape this week, rewarding infrastructure providers with upgrades while penalizing software companies over concerns about execution and competitive disruption.

Infrastructure Bets Earn Upgrades

Advanced Micro Devices (AMD) received a notable upgrade to Strong Buy from Outperform by Raymond James. The firm projects the server CPU market will expand at a 44% five-year compound annual rate to approximately $201 billion by 2030, driven by new "agentic workloads" that primarily run on CPUs. The analyst note stated that "AMD offers the strongest combination of direct earnings leverage, datacenter positioning and market-share gains."

In a related move, Northland Capital Markets upgraded Semtech (SMTC) to Outperform. The firm argued that connectivity has become "the AI bottleneck in terms of power and performance," a trend benefiting Semtech as it gains market share. Data center revenue now accounts for 30% of Semtech's total sales, a figure Northland expects to reach 44% by the end of 2027.

Software Giants Face AI Headwinds

On the software side, both JPMorgan and Bank of America downgraded Intuit (INTU) to Neutral. The catalyst was the company's fiscal 2027 revenue forecast of 9-10% growth, a marked slowdown from 14% in 2026. Analysts from both banks noted this suggests competitive pressures from AI are spreading beyond its TurboTax unit and into its broader business solutions segment.

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SAP also faced a downgrade to Neutral from Buy by UBS, which cited the company's "slow progress on agentic AI." Analysts highlighted that SAP has delivered just 17 out-of-the-box AI agents against a year-end target of 200, raising the risk that customers may pursue their own AI solutions instead. UBS also pointed to a potential deceleration in cloud backlog growth in the second half of the year.

Valuation and Growth Outlook in Focus

Bank of America provided a different perspective on the sector, reiterating its Buy rating on semiconductor equipment maker ASML. The bank argued that the stock's recent underperformance and valuation discount to peers are "difficult to justify" given its strong growth prospects.

BofA analysts pointed to consensus expectations for ASML to deliver the strongest earnings growth among large-cap peers at a 39% compound annual growth rate. The firm stated that the simultaneous de-rating of ASML while its peers have re-rated higher "largely explains the stock’s significant underperformance over the past 12 months."