AMD’s AI Prospects Stronger Than Expected, Says Benchmark Analyst
Wall Street may be underestimating AMD’s position in AI, according to Benchmark Research, which reaffirmed its confidence in the chipmaker’s growth potential.
Following AMD’s weaker-than-expected earnings forecast last quarter, investor sentiment around the company’s role in the AI chip market cooled. However, Benchmark analyst Cody Acree believes AMD’s competitive stance is improving across both AI and PC segments.
Acree reiterated a buy rating on AMD’s stock with a price target of $170, citing increased optimism after a recent fireside chat with AMD Chief Financial Officer Jean Hu.
“We came away with further conviction in the company’s strong fundamental position,” Acree noted in a client report. He emphasized AMD’s “increasing competitiveness in the AI market” and its market-share gains in both PCs and servers, particularly against rival Intel Corp.
AI Product Roadmap Boosts AMD’s Standing
Concerns mounted last quarter when AMD’s data center revenue fell short of Wall Street expectations, and the company ceased providing individual forecasts for its AI chips. Despite this, AMD announced an accelerated launch of its next-generation AI accelerator, the MI350, now scheduled for mid-2025 instead of the latter half of the year.
The product roadmap shift, combined with Nvidia’s prior delay of its Blackwell series chips, led Acree to conclude that AMD is closing the performance and timing gap with its competitors.
Expanding Server and PC Market Footprint
Benchmark also highlighted AMD’s continued success in growing its server market share, as well as an expansion into the corporate PC sector through its partnership with Dell Technologies Inc. “Dell’s ramp alone should drive a material increase in the company’s commercial PC market share,” Acree stated.
While recent comments from Intel raised fears of inventory stockpiling ahead of potential tariffs on Chinese goods, Acree said AMD has not observed any unusual buying patterns.
“AMD has not seen any evidence of customers buying additional volumes in [the fourth quarter] ahead of anticipated Trump administration tariff increases, [contrary] to comments recently made by Intel during its last earnings call,” he wrote.
Stock Recovers After Hitting 52-Week Low
AMD shares rose modestly in early trading Tuesday, reflecting a slight recovery after touching a 52-week low earlier this month.
The analyst’s reaffirmed outlook signals that Wall Street’s concerns about AMD’s AI positioning may be overstated, with the company’s accelerated AI product launch and strategic partnerships supporting future growth.
As the competition in AI and PC markets intensifies, AMD’s progress suggests it could gain ground on both Nvidia and Intel.
