Wall Street outlook shifts as Bank of America cuts Salesforce and AI power demand drives utility deal

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Highlights

Bank of America reinstates Salesforce with a sell rating and $160 target due to AI-driven restructuring concerns, while ServiceNow receives a buy rating at $130.
NextEra Energy agrees to acquire Dominion Energy, creating the world's largest regulated electric utility to meet surging AI-linked power demand.
China's April retail sales drop to a 40-month low, with industrial output and investment growth missing expectations, raising expectations for policy stimulus.

Analyst calls reshape Monday market positioning

As reported by CNBC, Bank of America reinstates coverage of Salesforce with a sell rating and a $160 price target, arguing the software company needs an AI-driven structural reset as concerns build over customer additions, upsell potential and monetization. The bank also reinstates ServiceNow with a buy rating and a $130 price target, saying agentic AI could become an opportunity for the company rather than a disruption risk.

Morgan Stanley also reshuffles views in semiconductor equipment, upgrading Lam Research to buy from hold while cutting Applied Materials to hold from buy. The change comes even after Applied Materials reports a strong quarter, with analysts pointing instead to narrowing revision potential in DRAM memory equipment and stronger prospects for NAND, which they say favors Lam.

Elsewhere, KeyBanc raises its price target on CrowdStrike to $700 from $525, citing higher cybersecurity spending after weaknesses highlighted by Anthropic's Mythos. Bernstein begins coverage on Arm Holdings with an outperform rating, pointing to the chip designer as a structural beneficiary of renewed CPU demand as AI agents spread, while Truist starts coverage of TJX with a buy rating, saying the retailer's scale gives it access to stronger product assortment and locations.

Citi also opens a 90-day positive catalyst watch on Constellation Brands, saying easier comparisons and the World Cup could support beer volumes for the owner of Modelo, Corona and Pacifico. This week remains important for the AI trade, with Nvidia scheduled to report on Wednesday night, while Home Depot and TJX are also due to post results.

Macro risks and AI infrastructure stay in focus

Investors are also digesting weaker April economic data from China, where retail sales hit a 40-month low and both industrial output and investment growth miss expectations. The figures raise the prospect of stronger policy stimulus as markets watch for support measures from Beijing.

In energy and infrastructure, NextEra Energy is set to buy Dominion Energy in a move described as creating the world's largest regulated electric utility, with the deal aimed at meeting fast-rising power demand tied to AI. At the same time, a county southwest of Dallas passes a one-year moratorium on data center construction in unincorporated areas, highlighting tensions around electricity use, water demand and local economic trade-offs.

Oil remains another key variable for markets after retreating from session highs. Comments from President Donald Trump on Iran and concern over conflict-related inflation add pressure to the rates outlook, while strategist Ed Yardeni argues the economic backdrop no longer supports an easing bias or a rate cut, underscoring how geopolitics and energy prices continue to shape expectations for the Federal Reserve.

Wall Street analyst calls set the tone for Monday trading in our earlier coverage, highlighting a wave of upgrades, initiations and price-target changes across AI-linked technology, retail and energy names. We noted bullish positioning in stocks such as Nvidia, Amazon, Arm and Lam Research alongside a more cautious stance on select names including Salesforce and CoreWeave, reflecting how firms are balancing AI optimism with valuation and risk concerns.

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