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AMD has faced significant challenges in its quest to challenge NVIDIA’s dominance in the AI chip market. Analyst Thomas O’Malley highlights factors like NVIDIA’s system-level architecture and hyperscale custom ASICs contributing to AMD’s struggles.
Despite expectations of modest year-over-year growth, O’Malley believes AMD’s MI series accelerators could achieve several billion dollars more due to falling investor optimism. However, he emphasizes that substantial competition won’t materialize until AMD integrates architectural expertise from its ZT Systems acquisition and addresses a significant software gap with NVIDIA.
AMD has gained market share in x86 PC and server segments, which adds to its potential upside. The analyst projects further growth for AMD’s Client and Server CPU businesses compared to Intel. Valuation-wise, AMD is seen as offering a discount relative to other accelerator-exposed names despite holding the third-largest AI compute revenue base.
O’Malley’s buy rating of $140 targets a 12% monthly gain, with an overall consensus suggesting optimism for potential one-year returns of ~39%. The article advises readers to do their own analysis before investing and directs them to TipRanks’ Best Stocks to Buy tool for attractive valuations.
AMD’s progress in AI, its market share gains, and analyst insights underscore its potential despite ongoing challenges. Investors should consider these factors while making informed decisions.
Source: https://www.tipranks.com/news/time-to-load-up-says-barclays-about-amd-stock