There’s a big day coming for AMD ( NASDAQ:AMD ) which could potentially serve as a catalyst for the stock. The chip giant’s Advancing AI event will be held on Thursday (October 10) in San Francisco.
Last year’s December event saw the unveiling of the Instinct MI300 series GPU/APU platform, while the company highlighted AI PCs and developments in its ROCm software suite. Additionally, AMD raised its projected 2027 AI TAM (Total Addressable Market) project from US$150 billion to over US$400 billion.
Cantor’s CJ Muse, an analyst ranked in the top 1% of Wall Street equity experts, expects this year’s event to include similar product announcements, including the official launch of the Torino data center CPUs and data center accelerators (MI325X), And computers powered by artificial intelligence. (Possibly Strix PRO). Muse believes another AI TAM update may be in the works as well, potentially extending to the 2028-2030 timeframe.
Looking at the bigger picture, with a “compelling AI-driven portfolio,” the 5-star analyst sees the company as well-positioned to post “sustained stock gains across the CPU and GPU data center landscape.”
Muse believes the $400 billion+ TAM represents a “huge opportunity” for the company. AMD may be a distant second behind Nvidia in the AI chipset game, but in order to achieve “significant share appreciation,” it doesn’t actually need to come close to matching Nvidia’s revenue, as just getting a portion of it is enough. “With a clear desire from customers to secure a second source of GPU accelerators, all AMD has to show is a vision to track market share to 10%+ and shares will be rewarded,” Muse said.
It is worth noting that against the backdrop of last year’s event, AMD shares rose by 10% in the subsequent session, which ultimately led to a year-over-year rise of 26%. Ahead of this year’s event, there are even greater expectations, and AMD will have to offer investors increased confidence in its technology roadmap. In this context, signals that AMD can achieve “heuristic design wins” across a broader range of customers outside of key customers will likely be a key focus (Amazon and Google are rumored to be making this offering, which bodes well). “So management could do well here,” Muse summarized. “AMD stock should outperform intraday and likely continue through the remainder of the fourth quarter of 2024 and into 2025.”
In terms of potential catalysts, Muse believes any developments that bolster confidence in AI GPU revenue growing to more than $12 billion in 2025 could push the stock price toward the $200 mark.
For now, Muse maintains an Overweight rating on the stock along with a $180 price target, meaning the stock will deliver 5% growth in the coming months. (To view Musa’s track record, click here)
At $188.04, the average target for the Street is slightly higher and results in one-year growth of approximately 10%. Overall, the stock has a Strong Buy consensus rating, based on a mix of 25 Buys versus 6 Holds. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
