The case for quadrupling from here

Just broke $180. Astounding. From here, could we get to $720? This from Barrons.

On Wednesday, AMD shares extended their rally, jumping 5.5%, thanks in part to a wildly upbeat analyst report. NewStreet Research’s Pierre Ferragu raised his AMD rating to Buy from Hold, with a $215 target price. That follows Tuesday’s bullish call by Wedbush analyst Matt Bryson, who repeated his Outperform rating and lifted his target price on AMD stock to $200, from $130.

Ferragu points out in a research note that AMD CEO Lisa Su last year projected the market for datacenter artificial intelligence chips at $400 billion by 2027.

“Lisa is to be taken seriously; this forecast might eventually prove wrong, but it was certainly not pulled out of a hat,” Ferragu writes.

If the market reaches that size, he says, there is upside for a whole range of companies, including Arista Networks, ARM, Broadcom, Infineon , Intel and Micron. However, he says AMD and TSMC stand out, leading to his AMD upgrade.

The analyst asserts that even if AI chip spending only reaches half of Su’s $400 billion forecast, total data center spending should growing at a 25% annual rate. And in a “fast adoption” scenario—in which AI growth reaches Su’s 2027 target—he adds, AMD’s stock price could quadruple from here.

Indeed, Ferragu sees AMD as the “best way to play a fast adoption scenario, with the most valuation and expectation upside.”

Ferragu says the 2025 outlook for AI-related data center spending is strengthening, and likely will show signs of matching his “fast scenario.” He expects competitive pressures to drive players like Google and Microsoft to invest heavily in infrastructure, the emergence of Copilots and other AI applications into general use, and the growing complexity of large language models from OpenAI, Google, and others.


The thing that may happen because of AI is that we could see a boom in new computers. AI requires new video cards and more RAM from what little I know. I’m wondering if because of AI we will see more new computers with more compute power resulting in the whole semi industry taking off. Think about workstations on the commercial side and all of us folks with our old desktops. I have an old desktop with an old I5 chip that needs replacing soon maybe. Its been a while since the whole semi sector had a good season…doc

Quadruple from $150/sh to $600 in 4 years? That seems like a pipe dream, but it sure would be sweet!

Well it would be sweet for sure. However we already have had a rise from 1st March 2017 price of $6.77 (when I first purchased), to todays close of $178.38 an increase of 26.34 times, and only over 83 months. Without doing the calculations a quadruple prediction in 47 months seems like playing it safe. :wink:


Without doing the calculations a quadruple prediction in 47 months seems like playing it safe. :wink:

Naah. Law of large numbers kicks in. It’s not impossible but AMD would be coming up on a trillion dollar company if they pulled that off… Are there other places to find a more likely 4x?

Yes, there is the law of large numbers which I translate as: that it’s easier to grow a small company than a large one. There is another more complex problem as well, way back in 2017 there were no real expectations on AMD now there are lots. We are all hoping AMD can put up a good showing against Nvidia. We are on a cusp of expectation now compared to early 2017 when it was more steady as you go.

If I knew how to find 4x stocks over 4 years I would have moved into merchant banking, on the other hand I managed to pick AMD on the basis that it was the best bang for buck computationally for my business. Just a matter of time I thought, before others realised that.

Intel earnings came out and they expect to not do well in the first quarter so they are being punished. AMD is getting dragged down after hours to the amount of $6 approx from Intels report. Tomorrow at the open I am anticipating AMD to maybe get pulled down below 170 possibly. Earnings are next week and its Friday, so I will stay away…doc

Its been a while since the whold semi sector had a good season…doc

There’s the talk lately that all those computers bought when the pandemic started are now hitting 4 years old and of course don’t have the AI features either present in new CPUs/GPUs, so that rollout of new features could do it :slight_smile:

On Wed, Jan 24, 2024 at 1:03 PM physician via Motley Fool Community <> wrote:

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