What factors are propelling Advanced Micro Devices (AMD) to new heights in the eyes of leading financial institutions? As we explore the recent developments in the tech sector, particularly the semiconductor space, one story stands out: Goldman Sachs’ analyst Toshiya Hari has raised the price target for AMD from $137 to $157. This adjustment, announced on December 18, 2023, has sent ripples through the industry, underscoring a broader confidence in AMD’s trajectory.
Hari’s optimism is rooted in detailed supply chain checks that reveal a growing adoption of AMD’s MI300 Data Center GPU across cloud and enterprise markets. This demand is reflected in revenue projections, with the analyst forecasting substantial growth. For 2023, the expected revenue from Data Center GPUs is $595 million, which balloons to $4.0 billion in 2024 and $7.9 billion by 2025.
This bullish outlook extends beyond revenue figures. Hari anticipates adjusted EPS, excluding SBC, to rise by 11% and 12% for 2024 and 2025, reaching $4.30 and $7.18, respectively. These adjustments are attributed to higher revenues and gross margins, with the lucrative Data Center GPUs contributing positively to corporate gross margins—despite partially offsetting increases in operating expenditure.
Furthermore, the strategic success of AMD’s Data Center GPUs is expected to complement a promising year for its server CPU franchise. Market recovery coupled with sustained market share gains could contribute to AMD’s stock outperformance in 2024. This scenario reflects the nuanced understanding of market dynamics that investors and market watchers rely on for making informed decisions.
The broader U.S. Semiconductor landscape also appears favorable, with companies like Nvidia Corp (NVDA), Arm Holdings Plc (ARM), Broadcom Inc (AVGO), and others set to benefit from the expansion of data center AI infrastructure. Within Hari’s spectrum of analysis, firms like Intel Corp (INTC) and Western Digital Corp (WDC) are slated to gain from a resurgence in PC volume growth, which could signal a positive turnaround for the sector.
For AMD specifically, Hari’s projections for the coming years are robust. Expected revenue and EPS for the calendar year 2023 stand at $22.63 billion and $2.70, with figures for 2024 and 2025 reaching even more impressive milestones. This growth narrative is not just isolated to AMD; Micron is also pinned for a bullish turn, with anticipated industry supply/demand dynamics fostering a series of positive EPS revisions.
Despite these glowing projections, AMD’s share price saw a slight decline of 0.42% to $138.56 on the last check. This minor dip, however, is often seen as a natural fluctuation in the ever-volatile stock market and may not necessarily reflect the company’s long-term potential.
As we digest these insights, it’s clear that the semiconductor industry is on the cusp of transformative growth, powered by advances in AI and data center technologies. Analysts like Hari play a crucial role in deciphering these trends, providing investors with actionable intelligence that could shape portfolio strategies.
To keep abreast of such pivotal developments, we invite our readers to delve deeper into the semiconductor space, follow key analysts, and engage with the ongoing dialogue through comments or further reading. Staying informed is key to understanding the fast-paced dynamics of the tech industry.
As a call to action, we encourage tech enthusiasts and investors to maintain a close watch on AMD and its peers within the semiconductor domain. With the continued growth in AI and data infrastructure, staying informed will be invaluable to navigating the potential ups and downs of the
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