Why Advanced Micro Devices Rallied Today

Globe and Mail

6 hours ago

Shares of artificial intelligence (AI) chipmaker Advanced Micro Devices (NASDAQ: AMD) rallied 9.8% on Monday, as of 12:43 p.m. ET
AMD made some big product announcements last week, especially around AI. Today, a Wall Street analyst wrote his positive conclusion on the event, and revealed some positive industry data in the PC space, too.
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Piper Sandler sees a snap-back in PC demand, GPUs
Last week's big event centered on AMD's new Instinct MI350 accelerators, and upcoming MI400 "Helios" racks, which will be available next year. But one sell-side analyst also sees some optimistic signs in AMD's client business, which led to a price target bump today.
On Monday, Piper Sandler semiconductor analyst Harsh Kumar noted he is seeing some "pull-ins" in the client space, which used to be AMD's largest, but is now its second largest after data centers. The PC has been mired in somewhat of a downturn for a few years now, but a combination of aging pandemic-era PCs, new AI PC capabilities, pull-ins ahead of potential further tariffs, and the coming phaseout of the Windows 10 operating system may be spurring a nice refresh cycle.
In addition, some investors were worried about the sequential decrease in AMD's data center and GPU revenue last quarter, where AMD hopes to compete more effectively against Nvidia. However, in the note today, Kumar also noted he sees a "snap-back" in that area, in the second half of the year, based on the new Instinct MI350 chips, which will be available in the second half of 2025, and "Helios" rack-scale systems, which will become available in the latter part of 2025.
As a result, Kumar raised his price target on AMD to $140, up from $125.
Can AMD find its competitive place in AI?
There are a lot of questions surrounding AMD at this moment, namely whether there is a place for its Instinct AI accelerators in the AI world where Nvidia currently dominates, and large cloud companies are all now building more custom AI silicon themselves.
However, it appears as though last week's product even was encouraging on that front, and that AMD's AI design progress and acquisitions are beginning to garner enthusiasm among the analyst community.
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