AMD Stock Doubles as AI Compute Demand Soars
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- AI Compute Growth: Since 2022, AMD's AI computing power has surged from 1 zettaflop to over 100 zettaflops, with expectations of a further 100-fold increase in the next five years to support advanced AI applications, indicating significant market potential and investment opportunities.
- New Product Launch: AMD's upcoming Helios rack system will feature 72 graphics processing units (GPUs) integrated with EPYC central processing units (CPUs) and networking components, aiming to enhance margins by consolidating multiple products to meet the rising AI compute demand.
- Competitive Market Advantage: Despite competition from larger chip companies, AMD's shift to rack-scale systems is likely to attract data center operators looking to reduce costs and dependence on a single supplier, thereby strengthening its market position and customer appeal.
- Revenue Growth Expectations: Wall Street analysts project AMD's revenue will increase from $25 billion in 2024 to $62 billion by 2027, which is expected to drive earnings growth and deliver attractive returns for investors.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMD is 284.10 USD with a low forecast of 200.00 USD and a high forecast of 377.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
36 Analyst Rating
27 Buy
9 Hold
0 Sell
Strong Buy
Current: 252.740
Low
200.00
Averages
284.10
High
377.00
Current: 252.740
Low
200.00
Averages
284.10
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AMD Stock Doubles as AI Compute Demand Soars
- AI Compute Growth: Since 2022, AMD's AI computing power has surged from 1 zettaflop to over 100 zettaflops, with expectations of a further 100-fold increase in the next five years to support advanced AI applications, indicating significant market potential and investment opportunities.
- New Product Launch: AMD's upcoming Helios rack system will feature 72 graphics processing units (GPUs) integrated with EPYC central processing units (CPUs) and networking components, aiming to enhance margins by consolidating multiple products to meet the rising AI compute demand.
- Competitive Market Advantage: Despite competition from larger chip companies, AMD's shift to rack-scale systems is likely to attract data center operators looking to reduce costs and dependence on a single supplier, thereby strengthening its market position and customer appeal.
- Revenue Growth Expectations: Wall Street analysts project AMD's revenue will increase from $25 billion in 2024 to $62 billion by 2027, which is expected to drive earnings growth and deliver attractive returns for investors.
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