AMD's Stock Finally Faces an Attractive Setup After a Volatile Period

July 15, 2024

minute read

Sentiment around shares of Advanced Micro Devices Inc. (AMD) has fluctuated significantly over the past nine months, driven more by market emotions than by the company’s fundamentals, according to a TD Cowen analyst.

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However, analyst Matthew Ramsay now sees a promising fundamental setup for AMD through the remainder of this year and into the next, particularly as the data-center business may begin to thrive amid easing pressures on AMD's other segments.

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Ramsay highlighted that while certain parts of AMD's revenue base are still facing challenges, the company has managed to sustain its market share through effective execution and strong product performance, even in a volatile environment. These positive trends are expected to lead to significant momentum in the latter half of 2024 and into 2025, with AMD poised to benefit from new product launches in both central processing units (CPUs) and artificial intelligence (AI).

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Specifically, Ramsay anticipates "some upside to core server, strong growth of MI300/325 ahead of the MI350/400 product cycles, and favorable PC seasonality in the near term." The MI300 and related products are AMD's offerings for AI servers.

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Ramsay adjusted his AI-accelerator revenue projections upward, now expecting $4.75 billion for this year and $9.5 billion for next year, compared to his previous estimates of $4.5 billion and $9 billion, respectively.

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Within AMD’s data-center business, Ramsay pointed out that the company now boasts the broadest server portfolio in its history, with offerings such as Genoa, Genoa-X, Bergamo, and Siena, leading up to the upcoming Turin launch.

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Additionally, he expects AMD’s personal-computer business to continue stabilizing and noted management's comments on the possibility of decreasing pressures on the embedded business.

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Ramsay increased his price target for AMD to $210 from $200 while maintaining his buy rating on the stock. Shares of AMD were slightly up in Monday morning trading.

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