Wall Street’s AI Frenzy: Nvidia Skyrockets, Oracle Tanking

AI Stocks Soar as Nvidia Hits $4T, Apple Feels the Heat, and Musk Doubles Down – Daily Roundup

28 September 2025

Nvidia’s Surge: Barclays hiked NVDA’s price target to $240 (up from $200), calling it the “most attractive” AI play as global AI infrastructure spending explodes ^[1]. Nvidia also agreed to invest up to $100 billion in OpenAI (ChatGPT’s parent) and supply it with cutting‑edge chips ^[2], helping push NVDA to record highs. Loop Capital now predicts a new “golden wave” of AI demand for Nvidia ^[3].
Microsoft Top Pick: Morgan Stanley named MSFT its top large‑cap software pick, raising the target to $625 from $582 ^[4]. Analyst Keith Weiss cited broadening AI and cloud drivers – 39% Azure growth, “highest probability positive risk/reward,” and even better AI‐margin today than in the last big cloud transition ^[5] ^[6]. CFO Amy Hood noted Azure AI margins are “better … than when we went through the … cloud transition” ^[7]. UBS and others stress Microsoft still holds the upper hand in its OpenAI partnership ^[8].
Oracle Slump: Oracle stock plunged after Rothschild Redburn launched coverage with a Sell and $175 target. Redburn warns investors “materially overestimate” Oracle’s cloud value ^[9] – its own 5-year Oracle Cloud guide implies only ~$60 billion in value ^[10] – and that its play supplying AI (e.g. OpenAI’s $500B “Stargate” data‑center project) is mostly fixed‑margin, with “upside accruing to OpenAI” instead ^[11]. In other words, analysts fear Oracle’s GenAI tailwinds are “more narrative than reality” and its valuation (forward P/E ≈45x ^[12]) is rich.
Alibaba’s AI Buildout: Bank of America lifted BABA to a $195 target (from $168) after Alibaba’s annual Apsara conference announced massive AI/cloud investments ^[13]. CEO Eddie Wu said AI demand has “far exceeded our expectations” ^[14]. Alibaba will expand global data centers (new regions in Brazil, Europe, etc.) and co‑develop AI systems with Nvidia ^[15]. The company unveiled Qwen3-Max – a 1-trillion‑parameter model said to beat GPT-5 on code tasks ^[16] ^[17] – and insists large language models are the “next generation of operating systems” ^[18]. Omdia notes Alibaba Cloud already holds 36% of China’s AI-cloud market ^[19].
Adobe’s AI Crossroads: Morgan Stanley cut Adobe to Equal‑weight, trimming the target to $450, citing slower digital-media subscription growth and uncertainty about GenAI monetization ^[20]. The analysts note that Adobe has been “embedding AI into everything” (Firefly, Copilot tools, etc.), but so far “direct ‘Gen AI’ monetization has lagged” expectations ^[21]. Adobe CEO Shantanu Narayen and CFO Dan Durn counter that every dollar of revenue should have an “AI implication” ^[22], and noted customers are generating 1 billion new Firefly images per month ^[23]. Even so, investors remain wary until AI investments clearly drive revenue and profits ^[24] ^[25].

In the past week analysts have swung between bullish upgrades and bearish downgrades in tech, all tied to the generative AI boom. Barclays boosted Nvidia on the view that AI datacenter demand will create a “very large TAM” – O’Malley estimates $2 trillion of planned AI spending on ~40GW of power in the pipeline ^[26] – while Morgan Stanley sees Microsoft’s Azure+AI momentum powering sustained growth ^[27] ^[28]. Databricks, for example, just teamed up with OpenAI to embed GPT‑5 into its enterprise data platform, a deal expected to generate $100 million in revenue ^[29] ^[30]. Databricks CEO Ali Ghodsi notes there is “overwhelming demand” from businesses for bespoke AI agents on their data ^[31], reflecting the same trend.

By contrast, pessimism is taking hold around some AI plays. Redburn’s new Sell on Oracle echoes concerns raised by Reuters: Oracle’s AI cloud ramp has made it a $933 billion valuation (pushing Larry Ellison’s fortune near the top of rich lists ^[32]), but skeptics point out Oracle is acting like a big financier of AI servers. Its cloud P/E (≈45x) far outstrips peers such as AWS (≈31x) or Azure ^[33]. Redburn warns Oracle’s economics are “largely fixed and contracted” and that OpenAI’s Stargate build‑out may not translate to huge profits for Oracle ^[34]. Meanwhile, Adobe’s stock has slid after weak guidance; analysts note that although Adobe is infusing AI everywhere, it has been “fostering broad adoption … ahead of monetization,” meaning revenue from AI tools isn’t kicking in as fast as hoped ^[35]. As one Wall Street firm puts it, Adobe’s current ~15x forward P/E “reflects compelling value”, but the timing of any AI-driven growth is unclear ^[36].

Other tech giants underline this intense AI spending race. Amazon CEO Andy Jassy just told shareholders AWS must invest “deeply and broadly in AI” — every customer experience, he said, will be reinvented by AI ^[37]. Google’s Sundar Pichai likewise vowed ~$75 billion in AI‑related capex this year ^[38]. These massive outlays (AWS is plowing billions into AI chips and data centers ^[39]) are what underpin analysts’ bullish cases for cloud and chip companies. But they also fuel concerns of a bubble. Nvidia’s rally, for example, has made it briefly the world’s most valuable company (exceeding Microsoft) ^[40], yet even top Nvidia strategists acknowledge risks: Barclays sets a $140 downside case if AI spending slows or GPU prices drop ^[41]. Loop Capital’s Ananda Baruah admits that, after such gains, Nvidia now trades at roughly the same 30× forward earnings as its own historical average ^[42], not a blowout premium – implying any stumble in this AI “golden wave” could dent expectations.

In summary, Wall Street’s AI-driven rally shows no signs of fading, but it’s far from one-sided. Bullish analysts have lifted targets and ratings for chipmakers (Nvidia), cloud platforms (Microsoft, Alibaba) and even some legacy software firms. Bearish analysts are warning on others (Oracle, Adobe) that may have less clear paths to converting AI hype into profits. As UBS notes, investors are split: Microsoft’s AI partnership with OpenAI still gives it an “upper hand” ^[43], but competition and cost remain issues. As one tech portfolio manager says, many investors are underestimating just how far AI can drive growth in computing and software – but until the final earnings prove it out, they’ll keep watching these high-flying names closely ^[44] ^[45].

Sources: Latest analyst notes and news reports on AI-related stocks ^[46] ^[47] ^[48] ^[49] ^[50] ^[51] ^[52] ^[53] ^[54] ^[55] ^[56]. Each quote and data point is drawn from financial and technology news coverage as cited.

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