Advanced Micro Devices (NASDAQ:AMD) has a history of successfully challenging industry leaders. Once dominated by Intel, the CPU market saw a significant shift as AMD offered competitive products and capitalized on Intel’s missteps, narrowing the gap and capturing a substantial market share.
Now, AMD faces a new challenge: disrupting Nvidia’s dominance in the data center AI market with its MI300 GPU. However, this ambition faces some hurdles. Nvidia’s Blackwell platform currently outstrips AMD’s MI300X in sparse performance by 2.67 times and boasts a memory bandwidth 2.8TB/sec faster, despite both offering 192GB of high bandwidth memory.
Nevertheless, AMD remains undeterred. In the last quarter, the company raised its 2024 MI300 revenue forecast from over $2 billion to more than $3.5 billion. Further insights into AMD’s strategies for penetrating the data center AI market are expected when the company releases its first-quarter earnings report on Tuesday, April 30th.
Ahead of the print, Susquehanna’s Christopher Rolland, a 5-star analyst rated in the top 2% of the Street’s stock pros, sees MI300 revenue topping $5B in 2024. Rolland suggests that further upward revisions to MI300 guidance are likely.
“We believe AMD has collected enough bookings/ backlog to support this guidance. We ultimately see MI300 revenue topping $5 billion in 2024 but note downward pressure on buy-side expectations from as high as ~$7 billion/$8 billion. For DC CPU, we note weaker server checks in January and February but a strengthening in March, which may ultimately help the 2Q DC outlook. While we continue to believe AI server GPU purchasing has crowded out CPU wallet share, the company has suggested a modest return to traditional server spend in 2H, buoyed by additional share gains, particularly in Enterprise,” Rolland opined.
The bottom line? Rolland rates AMD shares a Positive (i.e. Buy), along with a $185 price target, suggesting ~16% upside from current levels. (To watch Rolland’s track record, click here)
It’s clear that Wall Street generally agrees with Rolland’s take on AMD. The stock has 32 recent analyst reviews, which include 25 Buys and 7 Holds, giving the stock its Strong Buy consensus rating. The share price is $159.66, and the average target of $204.15 indicates room for ~28% growth in the year ahead. (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.
