SA analyst upgrades/downgrades: GOOG, MSFT, COIN, SMH

Recent analyst actions include both upgrades and downgrades for major tech companies, with changing perspectives on AI growth prospects. JR Research has downgraded semiconductor VanEck Semiconductor ETF (NASDAQ:SMH) and tech giant Microsoft (NASDAQ:MSFT) from Buy to Hold, citing concerns about overheated valuations and potential trade uncertainties. Meanwhile, Alphabet Inc. (NASDAQ:GOOG) received an upgrade from Hold to Strong Buy by A.J. Button, who highlights Google’s competitive AI offerings and market position. Coinbase Global, Inc. (NASDAQ:COIN) also saw a positive shift, with analyst Rafa F. Oliver, CFA, upgrading the cryptocurrency platform based on its stablecoin strategy and diversifying revenue streams.

Upgrades

• Alphabet Inc. (NASDAQ:GOOG): Upgrade Hold to Strong Buy by A.J. Button. The analyst cites Google’s strong AI capabilities with its recent Google AI Pro and Ultra Plans, along with the success of its VEO 3 video AI model and growing Gemini downloads.

  “Google’s success in defending its search market share, and in building a high-value AI service, bodes well for the company’s future results. The company’s continuing strength in search argues that that segment can continue delivering high margins. Meanwhile, the company’s paid AI offerings are just getting started, and the cloud segment has a large growth runway ahead of it.”

• Coinbase Global, Inc. (NASDAQ:COIN): Upgrade Hold to Buy by Rafa F. Oliver, CFA. The analyst emphasizes Coinbase’s relationship with Circle and the growing adoption of stablecoins as key factors driving future growth.

  “The explosion of stablecoin adoption is going to benefit Coinbase handsomely due to its dual relationship with Circle Internet Group. The company is not a leader in the crypto exchange platforms industry, but it is gaining scale and diversifying away from a volatile transaction business to a subscription model with Coinbase Base.”

Downgrades

• VanEck Semiconductor ETF (NASDAQ:SMH): Downgrade Buy to Hold by JR Research. The analyst notes that while the AI infrastructure thesis remains valid, geopolitical tensions and trade uncertainties with China create significant risks for semiconductor stocks.

  “Semiconductor investors have had much to celebrate lately. A cursory glance over the price chart of VanEck Semiconductor ETF (NASDAQ:SMH) hints at a possible re-test of its early January 2025 highs.”

• Microsoft Corporation (NASDAQ:MSFT): Downgrade Buy to Hold by JR Research. The analyst cites challenges with OpenAI’s partnership and potential overvaluation following the stock’s rapid recovery from April lows.

  “The incredible spurt that recovered all the losses from July 2024 and more in just two months suggests froth has arguably percolated into MSFT’s bullish optimism. While the bearish price action hasn’t been observed, MSFT’s forward EBITDA multiple of 21x suggests caution is warranted, well above its historical average of 17x.”