AMD Receives Another Improvement. Why an Analyst Suggests a Four times of the Stock.
Since the beginning of the year, shares of Advanced Micro Devices have increased 20% due to a wave of optimism surrounding the company's prospects in chips used for artificial intelligence applications.
AMD's rising comparisons a 25% increase in Nvidia's stock price.
Regarded as the leader in AI chips is NVDA 4.54%.
AMD's stock continued to rise on Wednesday, rising 5.5%, in part because of an extremely positive analyst report. Pierre Ferragu of NewStreet Research upgraded his AMD rating from Hold to Buy, with a $215 target price. This comes after Wedbush analyst Matt Bryson made a bullish call on Tuesday, stating his Outperform rating and raising his target price for AMD stock to $200 from $130.In a research note, erragu notes that Lisa Su, the CEO of AMD, predicted last year that the market for artificial intelligence chips for datacenters would reach $400 billion by 2027.
Ferragu writes, "Lisa is to be taken seriously; this forecast might prove wrong eventually, but it was certainly not pulled out of a hat."
He claims there is potential for growth for a number of businesses, such as Arista Networks, ARM, and Broadcom, if the market reaches that size.
AVGO 4.01%, Micron, Infineon, and Intel. But he asserts that Taiwan Semiconductor Manufacturing and AMD
2330 -0.16% stick out, which prompted him to update his AMD.The "best way to play a fast adoption scenario, with the most valuation and expectation upside," according to Ferragu, is with AMD.
According to Ferragu, the picture for data center spending related to AI in 2025 is getting better and is probably going to resemble his "fast scenario." He believes that forces of competition will propel companies like Google and Microsoft.
MSFT 1.44% to make significant infrastructural investments, the widespread adoption of Copilots and other AI applications, and the increasing intricacy of big language models from OpenAI, Google, and other companies.
He continues, "The most de-risked play is Taiwan Semiconductor, which offers limited market share uncertainty, upside to expectations, and attractive valuation in both a fast and a slow adoption scenario."