Shares of AMD are experiencing a significant uptick following an upgrade from investment firm CFRA, which highlighted the company’s strong growth prospects. Analyst Angelo Zino, who holds a 4.5-star rating, believes that AMD is set to close the competitive gap with Nvidia by 2026, attributed to the anticipated launch of its new MI400x chips and a strategic shift towards rack-scale computing solutions. This upgrade follows AMD’s recent acquisition of ZT Systems, which is expected to enhance its GPU sales and support this transformative phase.
Zino also noted the increasing adoption of AMD’s AI accelerators among prominent clients like Oracle and OpenAI, emphasizing the company’s expanding footprint in the market. Furthermore, AMD is making strides in refining its AI software stack, ROCm, which complements its hardware offerings.
Looking ahead, AMD is poised for a notable rebound in the GPU server sector anticipated to begin in the fourth quarter, alongside potential growth spurred by sovereign AI projects and a possible reopening of the Chinese market. These factors collectively predict an upward trajectory in demand and opportunities for AMD. Consequently, Zino has upgraded his rating for AMD from Buy to Strong Buy, while also increasing his price target significantly from $125 to $165.
Overall, AMD holds a Moderate Buy consensus rating among analysts based on 23 Buy ratings, 10 Hold ratings, and no Sell ratings issued in the last three months. Despite the optimistic outlook, the average price target of $132.17 suggests a slight downside risk of around 3.4%.
AMD’s pathway forward appears promising, indicative of a competitive strategy that positions the company well within the rapidly evolving tech landscape.