Investing.com -- Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week.
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Robinhood
What happened? On Monday, Barclays (LON:BARC) upgraded Robinhood Markets Inc (NASDAQ:HOOD) to Overweight with a $49 price target.
*TLDR: Barclays upgraded Robinhood citing strategic roadmap. Market conditions expected to benefit HOOD persist.
What’s the full story? Barclays is more positive on Robinhood noting growing confidence in the company's long-term roadmap, which presents a unique opportunity for product and geographic expansion. The Tier 1 bank highlighted the favorable conditions that benefitted HOOD throughout 2024, such as higher-for-longer interest rates and constructive equity markets, are expected to persist or improve, particularly in the realm of cryptocurrency.
Deutsche’s optimism stems from HOOD’s strategic vision and the anticipated continuation of market conditions that have been advantageous to Robinhood.
The analyst lastly noted Robinhood is well-positioned for future growth and expansion.
Overweight at Barclays means “The stock is expected to outperform the unweighted expected total return of the industry coverage universe over a 12-month investment horizon.“
Applied Optoelectronics
What happened? On Tuesday, B. Riley downgraded Applied Opt (NASDAQ:AAOI) to Sell with a $14 price target.
*TLDR: B. Riley downgraded AAOI over 400G adoption concerns. Analysts suggested an overextended rally due to NVIDIA's unbundling.
What’s the full story? B. Riley downgraded AAOI citing concerns over a deceleration in the adoption of 400G technology. The firm expressed skepticism over AAOI's ability to reach its $100M quarterly revenue target without qualifications for 800G products from major hyperscalers, relying heavily on CATV instead. Despite AAOI and Lumentum shares performing strongly in the second half of the year, the analysts perceived this rally as overextended, especially when compared to their peers Coherent (NYSE:COHR) and Fabrinet (NYSE:FN), which did not see similar gains.
B. Riley suggested that discrepancies in the performance of U.S. optical companies could be attributed to the ongoing unbundling of NVIDIA platforms, which had already led to a downgrade of FN to Sell. They noted LITE's recent 800G hyperscaler wins, indicating potential vendor shifts among major tech companies. While the market pinned hopes on LITE and AAOI capturing a share of 800G revenues, The analysts questioned the scale of these incremental opportunities, pointing out that any potential growth might not match investors' expectations.
Sell at B. Riley means “We generally expect “Sell” rated stocks to have a below-average risk-adjusted total return over the next 12 months. We recommend that investors reduce their positions until the valuation or fundamentals become more compelling.”
Monolithic Power
What happened? On Wednesday, Citi initiated coverage on Monolithic Power Systems Inc (NASDAQ:MPWR) at Buy with a $700 price target.
*TLDR: Citi sees MPWR sell-off as an investor opportunity. Analysts target $700 amid sales growth potential.
What’s the full story? Citi noted that MPWR experienced a 40% sell-off due to losing share at Nvidia (NASDAQ:NVDA), reducing its premium to the SOX index to a decade-low of 20-30%. The analysts highlighted this as a prime opportunity for investors interested in a high-quality analog semiconductor firm, owing to MPWR’s history of over 20% sales growth and over 30% EPS CAGR over the last ten years.
Believing that MPWR could maintain its sales growth above 20%, the analysts pointed to an impending analog inventory replenishment and rapid expansion in AI and automotive markets as potential compensatory factors for the company's share loss. They set a price target of $700, based on a multiple of 36 times projected 2026 EPS, aligning it with the trading range prior to the AI upturn.
Buy at Citi means “Buy (1) ETR of 15% or more or 25% or more for High risk stocks; and Sell (3) for negative ETR.”
Palantir Technologies
What happened? On Thursday, Baird initiated coverage on Palantir Technologies Inc (NASDAQ:PLTR) at neutral with a $70 price target.
*TLDR: Baird optimistic about Palantir's AI-driven growth. Analysts advise caution due to valuation concerns.
What’s the full story? Baird expressed optimism about Palantir Technologies' growth potential, particularly noting its focus on enhancing AI capabilities for western institutions and governments. The company's AIP platform, introduced in 2023, significantly boosted U.S. commercial growth by 54.3% year-over-year in Q3, driving total revenue growth to 30%.
The analysts highlighted Palantir's success in deploying generative AI applications into production, forecasting this as a key area for value extraction in the future. While positive on Palantir's market position, they advised caution due to its strong year-to-date performance and current valuation
Neutral at Baird means “Expected to perform in line with the broader U.S. equity market over the next 12 months.“
Spotify
What happened? On Friday, Inderes initiated Spotify Technology SA (NYSE:SPOT) at Reduce with a $470 price target.
*TLDR: Inderes cautious on Spotify valuation despite profitability. Analysts see high multiples; seek better risk/reward.
What’s the full story? Inderes noted Spotify's successful transition to profitability and strong free cash flow, highlighting its solid fundamentals and robust user growth. Despite these achievements, the analysts expressed caution about the current valuation, which they believe already accounts for these strengths.
Over the past two years, Spotify's stock has risen significantly, reflecting increased investor confidence in its growth initiatives. However, based on 2025 estimates, the analysts flagged the company's forward EV/FCFF and EV/EBIT multiples of 29x and 42x as relatively high. While acknowledging long-term prospects like user base expansion and margin improvement, they sought a more favorable risk/reward balance.
Reduce at Inderes means “The 12-month risk-adjusted expected shareholder return of the share is weak.”