JPMorgan Upgrades Meta on AI Agent Potential, Names KLA Top Chip Equipment Pick

JPMorgan has upgraded Meta Platforms (META) to Overweight from Neutral, citing the company's significant progress in artificial intelligence as a new catalyst for growth beyond its core advertising business.

JPMorgan's Bullish AI Calls

Analysts at the investment bank raised their price target on Meta to $820 from $640, highlighting the potential of its AI agents and frontier models. Analyst Doug Anmuth noted that Meta's AI model releases, including Muse Spark 1.3, are now competitive with leading models from rivals. He pointed to a potential market for AI agents in the "tens of trillions of dollars," while also noting that Meta's core advertising business still has "meaningful headroom."

In the semiconductor space, JPMorgan named KLA Corp. (KLAC) its new top pick among U.S. chip-equipment makers. The bank raised its forecasts for the wafer fabrication equipment (WFE) market, projecting a 28% compound annual growth rate from 2025 to 2028. Analysts see KLA as having the most attractive risk/reward profile due to its relative stock underperformance year-to-date and its strong exposure to an expected spending shift toward foundry and logic in 2027.

JPMorgan also initiated coverage on the American Depositary Receipts (ADRs) of SK Hynix with an Overweight rating. The bank sees the AI-driven memory chip upcycle lasting for five or more years and set a June 2027 price target of $245 on the stock, anticipating a 34% earnings per share compound annual growth rate over the next two years.

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Other Key Analyst Moves

Bernstein initiated coverage of Shopify (SHOP) with an Outperform rating and a $160 price target. Analyst Mark Shmulik argued that AI disruption risks are overblown, calling them "storms in teacups." He believes AI will ultimately expand the market Shopify serves and highlighted the stock as an "AI-enabled entry point," with the company's valuation below its historical range.

Morgan Stanley turned more selective on semiconductor stocks, upgrading Synopsys (SNPS) to Overweight while downgrading European peer Infineon to Equal Weight. Analysts cited an attractive entry point for Synopsys following a recent de-rating and an "underappreciated opportunity from physical AI." The move reflects a view that while AI demand remains strong, the memory cycle may be approaching an inflection point, warranting a more targeted investment approach.