By Analyst Matthew Ramsay has raised his price target for AMD stock (ticker: AMD) to $135 from $115, reaffirming his Outperform rating. Despite any short-term softness, investors are urged to focus on AMD’s growth prospects in the artificial intelligence semiconductor market.
While the PC industry has experienced weak sales in recent quarters, AMD is poised to benefit from the booming AI sector. IDC reports a 13% decline in worldwide PC shipments in the June quarter, attributing it to a soft macro environment and poor demand from consumers and corporations. However, their research also highlights a shift in technology budgets away from hardware devices, post-pandemic.
In contrast to the challenging PC market, AMD is positioned to capture a multibillion-dollar opportunity with its new AI chips by 2025. The company’s strong data center prospects and the crystallizing AI strategy supported by robust products will play a significant role in its success. Moreover, competition in the larger AI total addressable market has customers eagerly seeking alternatives to Nvidia, the current leader in AI chip solutions.
With the stock already rising 50% over the past year, outperforming the iShares Semiconductor exchange-traded fund (SOXX), there is significant potential for further growth. Tae Kim at s.com
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