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AMD Receives Positive Reception from Wall Street


Advanced Micro Devices (AMD) has received favorable attention from Wall Street following its recent artificial intelligence event, with notable interest from industry giants like Microsoft and Meta Platforms. Although AMD still has a way to go to catch up with industry leader Nvidia, the company’s stock has risen by 3.1% to $120.45 in premarket trading, contributing to an impressive 80% surge for the year.

New Product Offerings

On Wednesday, the chipmaker announced that its Instinct MI300X accelerators were now available for data-center customers and server manufacturers. Additionally, AMD unveiled a new range of laptop processors. Notably, the company highlighted that its latest MI300X products can outperform the Nvidia H100 HGX server platform by up to 60% for certain AI model inference workloads.

Industry Adoption

The news of AMD’s advancements in AI technology has garnered attention from major players in the industry. According to an official news release from AMD, Microsoft, Meta, and Oracle have either adopted or are in the process of adopting the MI300X accelerators. This development has left Wall Street cautiously optimistic about AMD’s future prospects.

AMD’s Success Hinges on Building a Strong Ecosystem

The importance of a comprehensive ecosystem, spanning software to networking, cannot be underestimated in AMD’s quest for success. Nvidia has set a prime example in this regard. While it may be a stretch to expect AMD to attain the level of support that Nvidia enjoys with its proprietary CUDA computer application, recent improvements suggest promising developments for scaling at major clients in 2024.

Positive Outlook from Raymond James Analysts

Raymond James analysts join in the chorus of optimism. They highlight Meta’s favorable commentary on the MI300X, emphasizing that Nvidia’s high margins give AMD the flexibility to price its accelerators competitively. Moreover, Raymond James foresees AMD’s potential for capturing additional market share in the generative AI market. This expected growth, coupled with margin expansion over the next two to three years, leads them to rate AMD shares as a Strong Buy and increase their price target to $140 from $125.

Oppenheimer Maintains a Cautious Stance

Oppenheimer analysts, while also commending AMD’s progress, exercise a more cautious approach. Recognizing the fruit of AMD’s efforts, they acknowledge NVDA as the predominant accelerator franchise. Consequently, they remain circumspect as AMD’s AI vision continues to unfold.

Despite some reservations, overall sentiment remains positive, with industry analysts recognizing and endorsing AMD’s strides towards growth.

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