2024-10-12 05:10:04
Key Takeaways
- Advanced Micro Devices may have disappointed investors with its Advancing AI event Thursday, but analysts said they’re still bullish on the chipmaker’s growth prospects.
- AMD shares fell Thursday after the company unveiled its latest AI chips without raising its outlook or announcing new partnerships as some investors had expected.
- However, Jefferies analysts said they believe AMD’s new AI chips could still drive gains for the stock with “enough demand to go around.”
Advanced Micro Devices (AMD) may have disappointed investors with its Advancing AI event Thursday, but analysts said they’re still bullish on the chipmaker’s growth prospects.
While AMD unveiled a number of new AI products at the event, Jefferies analysts said investors may have been looking for clearer signs of competition with Nvidia (NVDA) and a new customer announcement, as well as “the potential for a raise of the AI guidance to $5 billion, which is likely now left to earnings.”
Shares of AMD fell 4% Thursday after the event, though they recovered some of those losses with a just over 2% gain Friday.
Chasing Nvidia
Bank of America analysts said AMD’s latest Instinct MI325X GPU “remains a full year behind NVDA’s latest Blackwell, with no near-term catalyst to change the dynamic.”
Jefferies analysts suggested AMD’s MI350 next year “would compete more favorably” with Nvidia’s Blackwell, “leaving AMD chasing NVDA for now.”
However, the analysts said they believe AMD’s new AI chips could still “drive further share gains” as companies race to build out their AI infrastructure, with “enough demand to go around.”
Jefferies maintained its “buy” rating for the stock and price target of $190, a more than 13% premium over Friday’s closing price of $167.89. Bank of America also maintained a “buy” rating with a price objective of $180. About three-quarters or 13 of the other 17 analysts tracked by Visible Alpha also held “buy” or equivalent ratings for the stock as of Friday, with a consensus target of $192.13.
