Analysts upgrade CoreWeave, downgrade Pega on shifting AI demand
Wall Street analysts are recalibrating technology valuations as soaring infrastructure demand for artificial intelligence contrasts with delayed software spending triggered by the same trend.
Truist upgraded CoreWeave to Buy from Hold, setting a price target of $126. The firm argues that enterprise adoption of open models and sovereign AI will drive sustained compute demand. It noted the stock trades at a significant discount to competitors despite its "leadership position."
Citizens downgraded Pegasystems to Market Perform from Outperform following "disappointing" second-quarter results. The firm pinned the weakness on "unprecedented changes in the AI market caused clients to delay their purchasing decisions."
These dueling calls highlight a bifurcation in how investors are pricing the AI boom, separating hardware infrastructure from enterprise software. Stifel capitalized on a recent selloff, upgrading DigitalOcean to Buy from Hold with a raised price target of $160 after shares fell 30% from their peaks.
Raymond James took a more cautious stance on mature software, downgrading Roper Technologies to Market Perform from Strong Buy as it initiated coverage. The analyst noted that near-term upside relies on a recovery in merger and acquisition activity. Raymond James also downgraded Trimble to Market Perform.
In healthcare, TD Cowen upgraded Genmab to Buy from Hold and lifted its price target to $43. The upgrade reflects confidence that the drugmaker's pipeline—including Epkinly, rinatabart sesutecan and petosemtamab—will offset a looming $3.6B patent cliff for Darzalex.
Utilities saw bullish shifts from Wells Fargo, which upgraded both Idacorp and NorthWestern Energy from Underweight to Equal Weight. The bank raised its Idacorp target to $154, citing that updated estimates show the stock is cheaper than it screens. It lifted NorthWestern to $62 as its pending merger with Black Hills has cleared every hurdle except Montana.
Consumer-facing stocks faced pressure from valuation-focused downgrades. JPMorgan cut Crown Holdings to Neutral from Overweight with a raised target of $121, citing exhausted World Cup volume benefits. Citi downgraded Marsh McLennan to Neutral from Buy at an unchanged $200 target, pointing to balanced risk and reward.
Jefferies lowered Amcor to Hold from Buy with a slashed target of $44.92. The firm argued that while the stock has rebounded from Middle East-related lows as cost concerns ease, a sustained multiple re-rating is "unlikely" given ongoing structural challenges.
