On Monday, CFRA maintained a Buy rating on shares of Advanced Micro Devices (NASDAQ:AMD), with a steadfast price target of $200.00. The semiconductor company recently shared detailed updates on its artificial intelligence (AI) hardware capabilities during Computex 2024, which included a range of products from data center solutions to personal computer components.
AMD announced its plan to adopt an annual release cycle for its AI accelerators, similar to the strategy employed by competitor NVIDIA (NASDAQ:NVDA). The company is set to make the Instinct MI325X accelerator available in Q4, emphasizing a significant memory capacity with 288GB of ultra-fast HBM3E. Looking ahead, AMD revealed that the MI350 Series is slated for release in 2025, promising up to a 35-fold increase in AI inference performance compared to the MI300 Series. Additionally, the MI400 accelerators are expected to launch in 2026.
The company's CPU offerings were also part of the announcements, with the Turin EPYC CPUs anticipated to hit the market in the second half of 2024. On the consumer side, AMD showcased the Ryzen AI 300 Series for Copilot+ PCs, indicating a push into AI-enhanced personal computing.
Despite trailing behind NVIDIA in the sector, AMD is projected to reach at least $4 billion in GPU server revenue in the calendar year 2024. This forecast is primarily backed by AMD's partnership with Microsoft (NASDAQ:MSFT). The company's future growth in the GPU accelerator market may be further bolstered if it successfully expands its collaborations with other major cloud service providers, such as Alphabet (NASDAQ:GOOGL) and AWS, which could significantly contribute to revenue growth in this product category.
InvestingPro Insights
In light of CFRA's optimistic outlook on Advanced Micro Devices (NASDAQ:AMD), real-time data from InvestingPro provides a more granular view of the company's financial health and market performance. AMD's market capitalization stands at a robust $262.84 billion, reflecting substantial investor confidence. Despite a slight revenue decline of 1.16% over the last twelve months as of Q1 2024, the company has managed to maintain a high gross profit margin of 50.56%, showcasing its ability to efficiently manage the cost of goods sold relative to sales.
Two notable InvestingPro Tips offer additional insights for investors considering AMD's stock. Firstly, analysts predict the company will be profitable this year, which aligns with CFRA's positive rating. However, it's important to note that 20 analysts have revised their earnings downwards for the upcoming period, suggesting a need for cautious optimism. Investors should also be aware that AMD is trading at a high earnings multiple, with a P/E ratio of 233.85, indicating that the stock may be priced optimistically relative to near-term earnings growth.
For investors looking to delve deeper into AMD's financials and market performance, additional InvestingPro Tips are available at https://www.investing.com/pro/AMD. With the use of coupon code PRONEWS24, readers can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a wealth of data and insights that can inform investment decisions.
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