On Tuesday, stocks of major chipmakers Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) gained 3.1% and 8.3%, respectively, with both hitting a new 52-week high. In addition, Micron (NASDAQ:MU) stock gained 2.7%. The upside comes after Keybanc analyst John Vinh reiterated a Buy rating on these stocks, backed by a bullish outlook for artificial intelligence (AI)-powered chips.
Furthermore, the analyst boosted his price targets for all three stocks: Nvidia rose to $740 from $650, AMD jumped to $195 from $170, and Micron climbed to $115 from $100.
Analyst’s Opinion
Regarding NVDA, Vinh believes the company’s AI capabilities remain robust and are capable of driving data center revenue past the $100 billion mark in 2024. Further, Nvidia is anticipated to launch its next-generation AI chip, the B100, in the third quarter. The analyst expects this advanced processor to deliver a 50% performance boost over its predecessor.
For AMD, Vinh sees a strong demand for the company’s AI chip, MI300X. He expects it to generate about $8 billion in revenue this year. The expected sales figure is much above his previous estimate of between $3 billion and $4 billion. Also, the analyst sees strong momentum in Genoa, AMD’s high-performance microprocessors, and expects it to have a 30-35% market share in the server market in 2024.
As for MU, the analyst expects the company to benefit from the launch of Micron’s HBM3E memory chips, expected later this year. These chips will be used to power advanced AI servers.
Which Semiconductor Stock is Best?
Wall Street analysts are currently bullish on all three stocks: NVDA, AMD, and MU. Regarding future price performance, analysts expect an upside potential of 17.9% and 13.5% in NVDA and MU, respectively, whereas a downside of 7.4% is projected for AMD. Thus, Nvidia stock seems to be the best semiconductor stock among the three.
