Advanced Micro Devices (NASDAQ:AMD) investors face a mixed outlook in 2024, despite the company’s potential to challenge Nvidia in the AI chip segment. Over the past 12 months, AMD shares have shed 10%, but Northland analyst Gus Richard sees an opportunity for growth.
Richard, ranked among Wall Street’s top stock experts, backs his optimism with several arguments. He expects AMD to gain share in AI GPUs, server CPUs, and PC clients as headwinds from embedded and gaming segments subside. Richard also believes the company has better products for server and client CPUs and will benefit from a stronger PC refresh cycle.
For 2025, Richard forecasts $9.5 billion in AI revenue, up from $5.2 billion, with a 7% increase in the first half of the year compared to 2024. He estimates that AMD’s MI325X will be competitive with Nvidia’s H200.
However, software remains a concern for AMD. While the company’s open-source ROCm platform is improving, it still lags behind Nvidia’s extensive software ecosystem and early development in GPU computing. Richard notes that AMD’s server microarchitecture, CDNA, is separate from its graphics GPU design, limiting developers’ options.
Despite this, Richard anticipates AMD will continue to eat away at Intel’s share in PC clients. As Microsoft ends support for Windows 10, which currently runs on about 1.2 billion systems, Richard expects strong PC demand in 2025. He rates AMD shares an Outperform (i.e., Buy) and sets a $175 price target, implying upside of approximately 40% from current levels.
The rest of the Street has an optimistic view of AMD, with the stock receiving a Strong Buy status based on 24 Buys and 8 Holds over the past three months. The average price target is $184.37, which yields an upside potential of 47%.
Source: https://www.tipranks.com/news/pull-the-trigger-says-top-analyst-about-amd-stock