Wall Street analysts are increasingly optimistic about Advanced Micro Devices, Inc. (NASDAQ:AMD), particularly regarding its advancements in artificial intelligence (AI). Piper Sandler analyst Harsh Kumar recently raised the price target on AMD stock to $140.00, up from $125.00, while maintaining an "Overweight" rating.
Optimism Fueled by GPU Growth and AI Accelerator Business
The firm's positive outlook is driven by growing confidence in AMD's graphics processing unit (GPU) segment and its ability to sustain strong results. Piper Sandler is particularly excited about AMD's latest product launches, including the new Helios rack system. This system is anticipated to significantly boost growth in AMD's Instinct AI accelerator business.
New MI350 and MI400 AI Chips
This analysis follows AMD's unveiling of its new MI350 AI chips and a preview of the upcoming MI400 series, further solidifying its position in the competitive AI market. The company is making significant strides in developing semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
Client Business Shows Improvement
Kumar also highlighted the improving performance of AMD's client business, its largest segment. Customer "pull-ins," reflecting earlier-than-expected orders, suggest increasing demand. Furthermore, AMD's GPU business is expected to rebound by the fourth quarter of Fiscal 2025, contingent upon resolving issues related to China.
In conclusion, investors are exhibiting strong confidence in AMD's strategic direction and its forthcoming AI products. Revised forecasts suggest that AMD can maintain its competitive edge in the semiconductor market. The rising AMD stock price reflects this optimism.