Balanced Outlook on AMD: Growth Opportunities Amid Competitive Challenges

J.P. Morgan analyst Harlan Sur has maintained their neutral stance on AMD stock, giving a Hold rating yesterday.

Harlan Sur’s rating is based on a combination of factors that reflect both opportunities and challenges for Advanced Micro Devices (AMD). While the company is poised for significant growth in its AI GPU business and continues to gain market share in server and client PC CPUs, these positive trends are balanced by the competitive landscape and execution risks. AMD’s diverse compute portfolio, including advancements in AI and server CPUs, positions it well for strong growth in the coming years, particularly with the anticipated ramp-up of its next-gen MI350 and MI400 platforms.
However, despite these growth prospects, the Hold rating suggests a cautious approach due to potential market volatility and competitive pressures. The company’s reliance on transitioning existing and new customers to its new platforms and the need to maintain its competitive edge in performance and cost efficiency are critical factors. Additionally, while AMD’s partnership with major players like Oracle and Dell opens up new opportunities, the execution of these strategies will be key to realizing the projected growth, justifying the Hold recommendation.