On Wednesday, AMD's stock price continued to rise 5.86% to $178.29 by the close
Since the beginning of this year, as optimism about the company's prospects in the field of artificial intelligence application chips has increased,$Advanced Micro Devices (AMD.US)$The stock price has risen 20%. The rise in the company's stock price and$NVIDIA (NVDA.US)$Echoing a 25% increase in stock price, Nvidia is regarded as a leader in the field of artificial intelligence chips.
On Wednesday, AMD's stock price continued to rise 5.86% to $178.29 by the close. Part of this is due to extremely optimistic reports from analysts. NewStreet Research analyst Pierre Ferragu raised AMD's rating from “hold” to “buy” and set a target price of $215. This follows Wedbush analyst Matt Bryson's bullish rating on Tuesday, who reaffirmed AMD's “outperforming the market” rating and raised AMD's price target from $130 to $200.
Ferragu pointed out in the research report that AMD CEO Su Zifeng predicted last year that by 2027, the size of the data center artificial intelligence chip market will reach 400 billion US dollars.
Ferragu wrote, “Su Zifeng's prediction must be taken seriously. This prediction may eventually prove to be wrong, but it certainly wasn't fabricated out of thin air.”
He pointed out that if the market reaches this size, then yes include$Arista Networks (ANET.US)$,$Arm Holdings (ARM.US)$,$Broadcom (AVGO.US)$,$INFINEON TECHNOLOG (IFNNY.US)$,$Intel (INTC.US)$und$Micron Technology (MU.US)$There will be room for growth for a range of companies included in it. He thinks AMD and$Taiwan Semiconductor (TSM.US)$Outstanding performance, which is why he raised AMD's rating.
The analyst asserts that even if spending on artificial intelligence chips is only half of the 400 billion US dollars predicted by Su Zifeng, total data center spending should grow at a rate of 25% per year. He also said that in the case of “rapid adoption” (meaning rapid acceptance and application of a new technology, product, or service by the market or consumer), that is, when artificial intelligence growth reaches Su Zifeng's 2027 target, AMD's stock price may quadruple.
In fact, Ferragu believes AMD is “the best choice in a rapid adoption scenario, with the greatest room for growth in valuations and expectations.”
Ferragu said the outlook for data center spending related to artificial intelligence in 2025 is growing and may show signs of being in line with his “rapid adoption.” He expected, like$Alphabet-A (GOOGL.US)$und$Microsoft (MSFT.US)$Such competitors will be driven by competitive pressure to invest heavily in infrastructure, the popularity of Copilots and other artificial intelligence applications, and the increasing complexity of large-scale language models from companies such as OpenAI and Google.
At the same time, he also added that TSMC is “a risk-minimized investment, providing limited market share uncertainty, upside that exceeds expectations, and attractive valuations, whether in a fast or slow adoption scenario.”
Editor/phoebe