There’s a big day coming up in the AMD (NASDAQ:AMD) diary that could potentially act as a catalyst for the shares. The chip giant’s Advancing AI Event will take place on Thursday (October 10) in San Francisco.
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Last year’s December event featured the unveiling of the Instinct MI300 series GPU/APU platform, while the company highlighted AI PCs and advancements in its ROCm software stack. Additionally, AMD raised its projected 2027 AI TAM (total addressable market) from $150 billion+ to over $400 billion.
Cantor’s C.J. Muse, an analyst ranked in the top 1% of Wall Street stock experts, anticipates that this year’s event will feature similar product announcements, including the official launch of its Turin data center CPUs, data center accelerators (MI325X), and AI PCs (likely Strix PRO). Muse thinks another AI TAM update might be in the cards too, potentially extending into the 2028-2030 timeframe.
Looking at the bigger picture, with a “compelling AI-driven portfolio,” the 5-star analyst sees the company as well-positioned to post “continued share gains across both the CPU and GPU data center landscape.”
Muse believes that $400 billion+ AI TAM presents a “vast opportunity” for the company. AMD might be a distant second place behind Nvidia in the AI chip game, but for it to drive “significant share appreciation,” it doesn’t actually need to get anywhere near matching Nvidia’s revenue haul, just capturing a portion of it should suffice. “With a clear desire from customers to secure a second source for GPU Accelerators, all AMD has to show is a vision for market share tracking to 10%+ and shares will be rewarded,” Muse opined.
It should be noted that on the back of last year’s event, AMD shares surged by 10% in the subsequent session, ultimately seeing out the year 26% higher. Ahead of this year’s event there are bigger expectations, and AMD will need to offer investors increased confidence in its technology roadmap. In this context, signs AMD can nab “Inference design wins” across a broader range of customers beyond key clients will likely be a major focus (Amazon and Google are rumored to be presenting, which bodes well). “If mgmt. can do a good job here,” Muse summed up, “AMD shares should outperform into the day and likely for the remainder of 4Q24E and into 2025E.”
Regarding potential catalysts, Muse thinks any developments that boost confidence in AI GPU revenues growing to more than $12 billion in 2025 could drive the share price toward the $200 mark.
For now, Muse keeps an Overweight rating on the shares along with a $180 price target, implying the stock will post growth of 5% in the months ahead. (To watch Muse’s track record, click here)
At $188.04, the Street’s average target is a bit higher and factors in one-year growth of ~10%. All in all, the stock claims a Strong Buy consensus rating, based on a mix of 25 Buys vs. 6 Holds. (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.
