Chip stock AMD (NASDAQ:AMD) recently offered up a look at its future plans with an event focused largely on artificial intelligence (AI) and what it was looking to do in that field. Analysts came out mainly in favor, though some took more of a wait-and-see approach. But investors were clearly all in and sent AMD shares up nearly 7% in Thursday afternoon’s trading.
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The event revealed, among other things, the Instinct MI300X, AMD’s latest AI accelerator, and a chip ultimately designed to take the fight for dominance in the AI infrastructure directly to Nvidia (NASDAQ:NVDA). And what a fight it’s becoming, too; last year’s figures suggested that the total market for AI accelerators would be $150 billion in 2027. This year, that figure ballooned to $400 million.
The analysts are taking a serious look at AMD and liking what they’re seeing. Deutsche Bank, for example, revealed that AMD is “…extremely well-positioned…” to be a winner in this market, thanks to growing partnerships and excellent performance. Meanwhile, Raymond James maintained a Strong Buy on AMD, citing Meta Platforms (NASDAQ:META) and its plans for the MI300X.
AMD Customers are Already Standing By
Not only is Meta interested in the MI300X, but so too is Microsoft (NASDAQ:MSFT), as both are looking at alternatives to Nvidia’s lineup. Better yet, the MI300X might draw more interest once it’s proven itself; if it’s of sufficient quality and sufficiently low expense, then it might be enough to lower the cost of making AI models. That, in turn, would draw plenty of interest in its own right as more model makers enter the market. With Nvidia chips often considered too high-priced to be much help, the end result is an opportunity for AMD and other chip makers to get in on the action.
Is AMD a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AMD stock based on 24 Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 77.13% rally in its share price over the past year, the average AMD price target of $128.77 per share implies 1.7% upside potential.
