Rothschild & Co. Redburn initiated coverage of neoclouds Nebius and CoreWeave with Sell ratings, arguing credit markets are pricing in risks that equities still ignore. The firm set an $84 price target on Nebius and $54 on CoreWeave. In the same note, it started coverage on six Bitcoin miners that have pivoted into AI infrastructure, Core Scientific, TeraWulf, Applied Digital, Cipher Mining, Hut 8 and IREN, all at Neutral. Rothschild's central argument is that hyperscalers carry more real economic leverage than their balance sheets show once off-balance-sheet commitments are counted, a dynamic the firm says could limit the next leg of AI infrastructure spending. Nebius carries the most downside in Rothschild's view, while CoreWeave has less downside risk but a risk-reward the firm still considers unattractive enough to warrant a Sell.
Bank of America Lifts S&P 500 Target to 7,400, Upgrades Communication Services
Bank of America's US Equity and Quant Strategy team raised its 2026 year-end S&P 500 target to 7,400 from 7,100 and set a 12-month target of 7,800, according to a note dated Sept. 18. The bank is forecasting 33% S&P 500 earnings growth in 2026 and 12% in 2027, and warned that the risk of a sell-off into year-end remains elevated because current multiples imply lower inflation than the US economy is likely to deliver. In its sector calls, the team upgraded S&P 500 Communication Services to marketweight from underweight, closing out a June 2025 downgrade that lasted 15 months; the sector is dominated by Alphabet and Meta, which together make up 78% of the S&P 500 Communication Services weight. BofA now expects cloud revenue at Microsoft, Amazon, Alphabet, and Oracle to outpace capex growth in 2027, though it flagged that uncommenced leases and non-cancellable contractual promises at the hyperscalers rose more than 50% between some recent quarters, well ahead of the more modest jump in debt on their books. Long-term earnings expectations for Info Tech now sit at 43%, an all-time high, while Comm Services growth expectations sit at 16%, which is why BofA prefers the hyperscalers over the chip trade at this level.
Dell Books Record $60.9 Billion in AI Server Orders, Sees $74 Billion Fiscal 2027 Revenue
Dell Technologies said it booked a record $60.9 billion in AI-server orders and generated $16.4 billion in AI-server revenues in the second quarter of fiscal 2027, exiting the period with a $95 billion backlog. The company said more than 6,500 customers are buying its Dell AI Factory offering, with 3,300 added over the past three quarters, spanning Neoclouds, sovereign customers and enterprises. Dell expects fiscal 2027 AI-server revenues of $74 billion, roughly three times the prior-year level, and estimates an addressable opportunity of more than $1 trillion, about half of the data-center demand it expects AI to drive by 2030. Competition is intensifying: Super Micro Computer entered fiscal 2027 with more than $60 billion in new orders and is targeting manufacturing capacity of more than 6,000 racks per month, while Cisco generated $9.3 billion in hyperscaler AI infrastructure orders in fiscal 2026. Dell shares have appreciated 351.2% year to date, and the Zacks Consensus Estimate for Dell earnings stands at $6.64 per share, up $2.12 over the past 30 days.
Amazon Backs AI Safety Testing Without Pausing Development
Amazon is pushing for tougher AI testing and safeguards while declining to support a coordinated pause in AI development, a stance that sent its shares up approximately 1.6% to $255.09. The company is backing stronger industry-government cooperation but stopped short of endorsing a development halt, a position that matters because Amazon spans proprietary models, Alexa, its AGI ambitions and Bedrock, where AWS customers can tap models from multiple providers. The economics behind that balancing act are growing: AWS generated $42.2 billion last quarter, and Amazon said both its AI and semiconductor businesses have surpassed $25 billion in annualized revenue run rates. Yet free cash flow swung to a $7.6 billion trailing outflow as infrastructure spending exploded. At $255.09, Amazon trades roughly 2.55% above its $248.74 GF Value estimate, putting pressure on the company to turn its enormous AI spending into durable growth without sacrificing trust.
Applied Digital Corporation
Cipher Mining Inc
CoreWeave, Inc. Class A Common Stock
Hut 8 Corp. Common Stock
Nebius Group N.V.
Core Scientific, Inc. Common Stock
Terawulf Inc
Iren S.p.A.
IREN Ltd
China Mobile Limited