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.
https://www.barrons.com/articles/amd-stock-upgrade-ai-chips-75e0f2bb
