Investing.com -- Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

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Nvidia top pick on AI dominance at BofA

Bank of America reaffirmed its Buy rating on NVIDIA Corporation (NASDAQ: NVDA ) shares, seeing it as the top pick for AI dominance.

The bank hiked its price target to $200 from $190, citing Nvidia’s unique position in compute-intensive inference, agentic applications, and AI-driven robotics.

"The company remains in a dominant position of leading the AI market," BofA stated, noting that Nvidia’s valuation of 29x/22x estimated PE for 2025 and 2026 remains attractive, given its expected 30%+ earnings CAGR compared to the S&P 500 and other tech giants.

Despite challenges such as China restrictions and the Blackwell transition, Nvidia delivered a strong fiscal Q4, with revenue surging 78% year-over-year to $39.3 billion, exceeding estimates by 3%.

Looking ahead, Q1 guidance projects revenue of $43 billion, a full $1 billion above expectations, marking a 66% YoY increase.

A major contributor to this growth was the stronger-than-expected demand for Blackwell chips. "FQ4 included nearly $11bn of Blackwell sales, well above the $4-$7bn expectations," BofA noted, reassuring investors about the product’s successful rollout.

However, higher production costs for Blackwell are expected to put slight pressure on gross margins, which are forecast to dip to 71% in Q1 from 72% in Q4 before rebounding in the second half of the year.

While Nvidia shares retreated after earnings, BofA sees this as a buying opportunity.

"We expect NVDA to re-energize as excitement builds for its flagship GTC tradeshow in mid-March," the analysts concluded, emphasizing that the stock remains attractively valued despite near-term AI market fatigue.

Cancelling data center leases could ‘foretell a sustained slowing’ in Microsoft Azure: analyst

Microsoft Corporation (NASDAQ: MSFT ) has canceled data center leases with at least two U.S. operators and scaled back international spending plans, according to TD Cowen analysts.

The cuts amount to “a couple of hundreds of megawatts,” based on supply chain checks cited in a note led by Michael Elias.

The company has also redirected a “considerable portion” of its planned international investment back to the U.S., signaling a possible slowdown in overseas expansion.

TD Cowen also said that Microsoft has pulled back on converting signed statements of qualification into data center leases, though it remains unclear whether this represents a delay or a termination.

Commenting on this, Bernstein analysts suggest these moves could “foretell a sustained slowing” in Azure’s growth.

Analyst Mark Moelder noted that Microsoft’s decision may be tied to increasing capacity at its own data centers, reducing the need for external leases.

Wolfe Research trims Google stock price target

This week, Wolfe Research analyst Shweta Khajuria lowered the price target on Google owner Alphabet (NASDAQ: GOOGL ) to $210 from $220 while maintaining a Peerperform rating.

The adjustment follows Wolfe’s in-depth analysis of its bottoms-up Search model, which evaluates the impact of query mix-shifts to AI-driven models, along with proprietary survey findings.

As a result, the firm has revised down its Search revenue estimates for fiscal years 2025 and 2026.

Despite the target cut, Wolfe maintains an Outperform rating based on valuation and remaining cost optimization opportunities.

"Our Outperform rating is based on our long-term view that the company’s scale, AI investments, category leadership position, and product catalysts should enable Alphabet to maintain digital advertising market, gain share in Cloud computing, generate new sources of revenue, and remain highly competitive in the Gen AI race,” Khajuria said.

“Valuation at current levels is reasonable on a growth-adjusted basis," the analyst added.

Bernstein lifts Alibaba rating amid AI optimism

Bernstein has upgraded Alibaba (NYSE: BABA ) to Outperform from Market-Perform, citing growing confidence in AI-driven expansion within Alicloud and a more disciplined approach to capital allocation.

The firm also raised its price target on the company’s U.S.-listed shares to $165 from $104 and lifted its Hong Kong target to HK$161 from HK$102.

“Alibaba’s shares have rallied strongly since China’s DeepSeek moment, as investors increasingly valued Alicloud in a SOTP calculation,” Bernstein analysts wrote.

While enthusiasm around AI may have temporarily cooled, Bernstein sees a more positive earnings trajectory for Alibaba, driven by strategic capital allocation and a strengthening AI market structure. A central pillar of the firm’s bullish stance is Alibaba’s evolving investment strategy.

“A better outlet for Alibaba’s investment dollars” is taking shape, with a focus on AI infrastructure rather than aggressive global e-commerce expansion, according to Bernstein.

The firm estimates Alicloud must grow revenues by 25-30% in fiscal year 2026 to offset depreciation costs from its quarterly capital expenditures, which exceed RMB 30 billion.

With AI offering higher margins compared to traditional cloud services, Bernstein expects Alicloud to be a strong competitor alongside Huawei and Tencent in China’s AI infrastructure race.

Beyond AI, Alibaba’s domestic e-commerce segment is also showing signs of improvement. The company’s 9.4% growth in customer management revenue (CMR) during the third quarter suggests stronger monetization, supported by enhancements in ad technology and increasing Taobao commissions.

“Our channel checks have pointed to improvement in the company’s ad product, which should help to support CMR growth,” Bernstein noted.

Looking ahead, the investment bank projects revenue acceleration for Alicloud in the March and June quarters, with investors likely to buy on any stock weakness as AI growth details emerge.

Equities to rebound, buy weakness in AI stocks, says UBS

U.S. equities experienced a volatile week, with the S&P 500 index losing more than 2% across the past five sessions.

Earlier in the week, Chinese stocks listed in the U.S. came under pressure amid concerns over new White House measures restricting Chinese investments.

Investor sentiment was further weighed down by President Donald Trump’s comments on potential tariffs on Canada and Mexico.

Despite the market’s recent volatility and uncertainty around Trump’s trade policies, UBS strategists believe investors will eventually refocus on core fundamentals, which they say “should support the equity rally further.”

UBS continues to rate the China internet sector as Attractive, citing strong fundamentals and early AI innovation successes.

The bank also expects AI-driven investments to expand significantly, forecasting a 35% rise in capital expenditures from the top four U.S. tech firms by 2025, reaching $302 billion.

“With improving AI adoption trends boosting monetization, we expect mid-teens returns for global AI stocks this year using our market capitalization opportunity framework,” UBS strategists noted.

The firm maintains its year-end target of 6,600 for the S&P 500 and emphasizes the importance of diversification and hedging to navigate ongoing market volatility.

UBS advises investors focused on long-term AI exposure to consider structured strategies or take advantage of pullbacks in high-quality AI stocks.