Advanced Micro Devices (NASDAQ:AMD) investors have had little to shout about lately, with shares under pressure amid growing fears that the company’s AI chip opportunity is slipping away. The bearish thesis that has emerged suggests the company may no longer be poised to siphon off any meaningful market share from segment leader Nvidia.
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Indeed, with shares down 32% over the past twelve months, the bears have had their moment. But as history often shows, moments like these can set the stage for compelling investment opportunities.
That’s precisely what Benchmark’s top analyst Cody Acree sees. After investor meetings with AMD’s CFO Jean Hu and VP of Financial Strategy and Investor Relations Matt Ramsay (yes, the same Ramsay who spent a decade issuing Buy ratings on AMD as an analyst), Acree struck a bullish tone.
“We came away with further conviction in the company’s strong fundamental position, its increasing competitiveness in the AI market, and its continued market share gains in both the Client and Server markets versus Intel,” said Acree, who sits in the top 2% of Wall Street stock pros.
Naturally, plenty of the conversation centered on the accelerated AI roadmap for the next-gen MI350 GPU, now set for a mid-2025 launch instead of the previously planned second half of the year. Meanwhile, AMD anticipates its Data Center revenue in the first half of 2025 will remain roughly the same as in the second half of 2024. That was a sticking point for investors in the recent Q4 earnings and attendant outlook, but the company says customers are holding off in anticipation of the new platform’s launch.
AMD also anticipates that the MI350 will be “much more directly competitive” with Nvidia’s Blackwell, while the MI400 is expected to match the technical abilities of Nvidia’s next-generation Rubin platform, set for release next year. The company believes that delays in Nvidia’s Blackwell, combined with the accelerated MI350 launch, indicate that it is “closing the competitive gap.”
While AI continues to dominate the conversation, AMD’s Client business has quietly gained momentum. The company finished Q4 on a stronger note than anticipated, with a healthy balance between supply and demand in both Desktop and Notebook CPUs. For 2025, AMD expects the total addressable PC market (TAM) to grow by a mid-single-digit percentage, but thanks to its competitive product lineup and strong design wins, the company believes Client segment revenue will outpace market growth significantly.
For Acree, all signs point to an overlooked opportunity. He remains firmly in the bull camp, issuing a Buy rating on AMD shares and setting a $170 price target – implying a 53% upside from current levels. (To watch Acree’s track record, click here)
Wall Street’s broader sentiment is cautiously optimistic. Out of 37 analysts covering the stock, 25 rate it a Buy, 11 call it a Hold, and 1 remains bearish, giving AMD a Moderate Buy consensus rating. The average price target of $147.88 suggests a potential 33% upside over the next year. (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.
