Ge Long Hui A P P·2025-11-18 16:06Core Viewpoint - Analysts have downgraded the ratings of Microsoft and Amazon, two of Wall Street's most favored tech stocks, citing unclear prospects for generative artificial intelligence and advising caution regarding large-scale data center operators [1] Company Analysis - Rothschild & Co Redburn's Alexander Haissl has lowered the ratings of Microsoft and Amazon from "Buy" to "Neutral," marking the first downgrade since he began tracking these stocks in June 2022 [1] - Microsoft’s target price has been reduced from $560 to $500, while Amazon's target price remains unchanged at $250 [1] Industry Insights - The report suggests that the economic benefits of generative AI are "far weaker than expected," challenging the narrative that generative AI is akin to the early cloud computing era [1] - Haissl indicates that the profit margin assumptions for generative AI have extended the depreciation cycle to 5 to 6 years, compared to 3 years during the early cloud computing phase, implying a significantly higher capital intensity and weakened pricing power for generative AI [1]