In recent months, Advanced Micro Devices (NASDAQ: AMD) has experienced remarkable growth, driven by the increasing demand for artificial intelligence (AI)-driven chips.
Notably, over the past year, AMD’s stock has surged nearly 150%, and the equity seems to be maintaining investor favor in 2024. Indeed, by press time, the stock had risen 28% year-to-date, trading at $174.99.
With the stock consistently trading in positive territory in recent months, there is interest in how AMD will fare amid growing competition in the chip market, dominated by players like Nvidia (NASDAQ: NVDA).
Picks for you
Analyst bet on Nvidia
In this line, according to a January 29 X (formerly Twitter) post by stock news aggregator StockMKTNewz, banking giant Morgan Stanley (NYSE: MS) analysts have retained an ‘Overweight’ rating for AMD, projecting a potential rally to around the $200 mark.
“Morgan Stanley today raised its price target on $AMD to $193 up from $128 while maintaining its Overweight rating,” he said.
However, not all Wall Street analysts share the same optimism. For instance, 36 analysts over at TipRanks report an average price target of $163.87 for the next 12 months for AMD, with a high forecast of $220 and a low forecast of $105.00, representing a -6.35% change from the last price.
The stock has also received a ‘strong buy’ rating from 28 analysts while eight are for hold.
AMD fundamentals
Looking ahead, AMD faces key fundamentals, and the upcoming fourth-quarter earnings report is expected to provide insights into the company’s performance after a successful 2023. The projected fourth-quarter 2023 revenues for AMD are $6.1 billion, indicating a year-to-date growth of 9%.
In an effort to challenge Nvidia’s dominance, AMD recently announced the launch of a new AI-focused chip, the MI300X. This move positions AMD as a potential key player in the AI-focused stocks market, particularly as Nvidia faces sales backlog issues.
The MI300X, a graphics-processing unit designed for generative AI technologies, is expected to generate around $2 billion in sales over the coming year and boasts more memory speed than Nvidia’s top-selling H100.
Reports also suggest that Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) could be potential customers for AMD’s MI300X. Additionally, growth in the Data Center and Client segments will likely boost AMD’s stock.
While AMD shows growth potential, it remains susceptible to market headwinds, such as decisions by the Federal Reserve on interest rates, which could impact the overall stock market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
