Road calls of the week

Investing.com — Right here is your Professional Recap of the highest takeaways from Wall Road analysts for the previous week.

InvestingPro subscribers at all times get first dibs on market-moving AI analyst feedback. Improve as we speak!

Robinhood

What occurred? On Monday, Barclays (LON:BARC) upgraded Robinhood Markets Inc (NASDAQ:HOOD) to Chubby with a $49 value goal.

*TLDR: Barclays upgraded Robinhood citing strategic roadmap. Market circumstances anticipated to profit HOOD persist.

What’s the complete story? Barclays is extra optimistic on Robinhood noting rising confidence within the firm’s long-term roadmap, which presents a singular alternative for product and geographic enlargement. The Tier 1 financial institution highlighted the favorable circumstances that benefitted HOOD all through 2024, similar to higher-for-longer rates of interest and constructive fairness markets, are anticipated to persist or enhance, significantly within the realm of cryptocurrency.

Deutsche’s optimism stems from HOOD’s strategic imaginative and prescient and the anticipated continuation of market circumstances which have been advantageous to Robinhood.

The analyst lastly famous Robinhood is well-positioned for future progress and enlargement.

Chubby at Barclays means “The inventory is anticipated to outperform the unweighted anticipated complete return of the trade protection universe over a 12-month funding horizon.“

Utilized Optoelectronics

What occurred? On Tuesday, B. Riley downgraded Utilized Decide (NASDAQ:AAOI) to Promote with a $14 value goal.

*TLDR: B. Riley downgraded AAOI over 400G adoption considerations. Analysts instructed an overextended rally attributable to NVIDIA’s unbundling.

What’s the complete story? B. Riley downgraded AAOI citing considerations over a deceleration within the adoption of 400G know-how. The agency expressed skepticism over AAOI’s capability to achieve its $100M quarterly income goal with out {qualifications} for 800G merchandise from main hyperscalers, relying closely on CATV as an alternative. Regardless of AAOI and Lumentum shares performing strongly within the second half of the 12 months, the analysts perceived this rally as overextended, particularly when in comparison with their friends Coherent (NYSE:COHR) and Fabrinet (NYSE:FN), which didn’t see comparable beneficial properties.

B. Riley instructed that discrepancies within the efficiency of U.S. optical corporations might be attributed to the continued unbundling of NVIDIA platforms, which had already led to a downgrade of FN to Promote. They famous LITE’s latest 800G hyperscaler wins, indicating potential vendor shifts amongst main tech corporations. Whereas the market pinned hopes on LITE and AAOI capturing a share of 800G revenues, The analysts questioned the size of those incremental alternatives, mentioning that any potential progress won’t match traders’ expectations.

Promote at B. Riley means “We usually count on “Promote” rated shares to have a below-average risk-adjusted complete return over the following 12 months. We advocate that traders scale back their positions till the valuation or fundamentals turn into extra compelling.”

Monolithic Energy

What occurred? On Wednesday, Citi initiated protection on Monolithic Energy Programs Inc (NASDAQ:MPWR) at Purchase with a $700 value goal.

*TLDR: Citi sees MPWR sell-off as an investor alternative. Analysts goal $700 amid gross sales progress potential.

What’s the complete story? Citi famous that MPWR skilled a 40% sell-off attributable to dropping share at Nvidia (NASDAQ:NVDA), decreasing its premium to the SOX index to a decade-low of 20-30%. The analysts highlighted this as a chief alternative for traders occupied with a high-quality analog semiconductor agency, owing to MPWR’s historical past of over 20% gross sales progress and over 30% EPS CAGR over the past ten years.

Believing that MPWR might keep its gross sales progress above 20%, the analysts pointed to an impending analog stock replenishment and speedy enlargement in AI and automotive markets as potential compensatory components for the corporate’s share loss. They set a value goal of $700, primarily based on a a number of of 36 occasions projected 2026 EPS, aligning it with the buying and selling vary previous to the AI upturn.

Purchase at Citi means “Purchase (1) ETR of 15% or extra or 25% or extra for Excessive threat shares; and Promote (3) for damaging ETR.”

Palantir Applied sciences

What occurred? On Thursday, Baird initiated protection on Palantir Applied sciences Inc (NASDAQ:PLTR) at impartial with a $70 value goal.

*TLDR: Baird optimistic about Palantir’s AI-driven progress. Analysts advise warning attributable to valuation considerations.

What’s the complete story? Baird expressed optimism about Palantir Applied sciences’ progress potential, significantly noting its deal with enhancing AI capabilities for western establishments and governments. The corporate’s AIP platform, launched in 2023, considerably boosted U.S. industrial progress by 54.3% year-over-year in Q3, driving complete income progress to 30%.

The analysts highlighted Palantir’s success in deploying generative AI purposes into manufacturing, forecasting this as a key space for worth extraction sooner or later. Whereas optimistic on Palantir’s market place, they suggested warning attributable to its robust year-to-date efficiency and present valuation

Impartial at Baird means “Anticipated to carry out consistent with the broader U.S. fairness market over the following 12 months.“

Spotify

What occurred? On Friday, Inderes initiated Spotify Expertise SA (NYSE:SPOT) at Scale back with a $470 value goal.

*TLDR: Inderes cautious on Spotify valuation regardless of profitability. Analysts see excessive multiples; search higher threat/reward.

What’s the complete story? Inderes famous Spotify’s profitable transition to profitability and powerful free money circulation, highlighting its stable fundamentals and strong person progress. Regardless of these achievements, the analysts expressed warning concerning the present valuation, which they imagine already accounts for these strengths.

Over the previous two years, Spotify’s inventory has risen considerably, reflecting elevated investor confidence in its progress initiatives. Nevertheless, primarily based on 2025 estimates, the analysts flagged the corporate’s ahead EV/FCFF and EV/EBIT multiples of 29x and 42x as comparatively excessive. Whereas acknowledging long-term prospects like person base enlargement and margin enchancment, they sought a extra favorable threat/reward steadiness.

Scale back at Inderes means “The 12-month risk-adjusted anticipated shareholder return of the share is weak.”