AMD price target soars to $185, boosted by TD Cowen, anticipating strong Q4 results. Strategic acquisitions and market share gains against Intel underscore AMD’s robust position in tech evolution.
AMD Price Target on 4Q Results.
AMD’s stock outlook got a boost as TD Cowen raised its price target from $130 to $185 per share, maintaining an Outperform rating. Analysts foresee strong Q4 results, citing challenges in gaming and embedded already factored into Street estimates.
The note highlights AMD’s server share gains, providing confidence amid Total Addressable Market (TAM) uncertainties.
The potential of MI300 in the AI TAM is seen as a significant upside for AMD in the coming years. Despite weak gaming and embedded sectors, analysts expect a solid Q4 performance, with Client recovery and data center strength. The ongoing stabilization in the PC market and normalized inventory levels position AMD for continued profitable share gains, especially with 2H AI PC launches on the horizon.
AMD Price Target: AMD Taking Market Share From Intel
During the third quarter, AMD made significant strides by seizing market share from Intel in both PC and server CPUs, as reported by Mercury Research.
In the dynamic realm of desktop PC processors, AMD surged to a formidable 19.2%, marking a substantial leap from the previous year’s 13.9%. Simultaneously, in the notebook PC processor arena, AMD flexed its muscles, commanding a 19.5% share, a notable ascent from the 15.7% recorded in the corresponding quarter last year.
The most impressive feat, however, unfolded in the highly competitive server CPU market. AMD’s dominance grew substantially, catapulting from 17.5% to an impressive 23.3% in the third quarter compared to the same period the previous year. These remarkable strides underscore AMD’s prowess in reshaping the landscape of CPU market dynamics.
AMD Price Target: AI Chips
At CES 2024, on the exciting date of January 8, AMD rolled out a lineup of cutting-edge desktop processors tailored for the emerging category of high-end personal computers known as AI PCs. Stepping back just a month, the anticipation built as AMD revealed its mobile processors geared towards notebook AI PCs.
Fast forward to December 6, AMD unleashed its Instinct MI300 accelerators and processors designed specifically for data centers. Positioned for high-performance computing and AI applications, these powerhouses are set to go head-to-head with Nvidia’s formidable H100 series devices.
Interestingly, the rollercoaster ride for AMD’s stock was equally captivating. On the day of its “Advancing AI” event, the market response was a 1.3% drop. However, in a twist of fate, the very next day, December 7, AMD shares soared by an impressive 10%, showcasing the market’s swift change of sentiment.
AMD Price Target: Fundamental Analysis
On October 31, AMD surpassed Wall Street’s Q3 earnings expectations but fell short of its outlook for the current period. Despite this, AMD’s forecast of strong sales for its AI chips for data centers boosted its stock by 9.7% in the next trading session. Q3 earnings were 70 cents per share on sales of $5.8 billion, with a 4% YoY increase. For Q4, AMD expects $6.1 billion in sales, up 9%, and predicts robust sales for its MI300 AI accelerators, aiming to exceed $2 billion in 2024. The eagerly awaited Q4 earnings report is scheduled for January 30.`
AMD Price Target: AMD Stock Technical Analysis
In July 2015, AMD shares hit a low of $1.61, a nearly four-decade record. However, the company began an impressive recovery and reached a pinnacle in December 2021, touching a record high of $164.46. Notably, this peak coincided with heightened PC sales during the Covid pandemic.
On November 22, AMD’s stock broke out of a cup-with-handle base, reaching a buy point of $122.11 according to IBD MarketSmith charts. Although the shares reached as high as $151.05 on December 29, they experienced a dip in the following session amid a broader tech stock sell-off. Fortunately, a quick rebound followed.
As of January 16, AMD shares closed the regular trading session at $158.74. Impressively, AMD boasts an IBD Relative Strength Rating of 97 out of 99, indicating strong performance compared to other stocks over the past 52 weeks. The company’s Composite Rating of 97 out of 99, derived from five proprietary ratings, further underscores its standing as a top growth stock.
In the ever-evolving stock market landscape, AMD’s journey from a historic low to its current strong position is a compelling tale of resilience and growth.
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AMD Price Target: Data Center-Related Acquisitions
Under Lisa Su’s leadership, AMD made strategic acquisitions, completing the $49 billion Xilinx deal in February 2022 and the $1.9 billion Pensando Systems acquisition in May 2022. These moves are boosting AMD’s presence in the data center market. AMD’s stock rose on both acquisition announcements. In June 2022, AMD outlined its growth potential, with a total addressable market now at $300 billion, up from $79 billion in 2020. AMD projects improving profit margins, free cash flow, and a 20% compound annual sales growth for the next three to four years.
Conclusion:
AMD’s stock outlook is on the rise, with TD Cowen raising its price target to $185 per share, citing strong potential in Q4 results. The company’s strategic moves, such as acquiring Xilinx and Pensando Systems, indicate a focus on data center market expansion. Notably, AMD’s success in capturing CPU market share from Intel and its foray into AI PCs and data center chips contribute to its positive trajectory. With a solid technical performance and a resilient growth story, AMD appears well-positioned for continued success in the dynamic tech landscape.
