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Analyst Overhauls AMD Stock Price Target as Gap with Nvidia Widens

Theodore QuinnWednesday, Jan 8, 2025 7:24 am ET

4min read

As the gap between Advanced Micro Devices (AMD) and Nvidia (NVDA) widens in the high-growth markets of artificial intelligence (AI) and data center, analysts are revising their price targets for AMD stock. The widening gap has led to a more cautious outlook for AMD's stock performance, with analysts predicting a 53.20% increase from the current stock price of $127.33, compared to Nvidia's 108.12% increase from its 52-week low. The average analyst rating for AMD has also dropped to a "Strong Buy," compared to Nvidia's "Strong Buy" rating.

NVDA, AMD Total Revenue (FY) YoY

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The widening gap between AMD and Nvidia is primarily due to Nvidia's dominant position in the AI market, driven by its industry-leading combination of GPU hardware and CUDA software platform. Nvidia's software moat around CUDA is viewed as a key competitive advantage that will make it difficult for rivals to displace Nvidia's leadership position. In contrast, AMD is expected to carve out a profitable niche in AI inference but faces challenges in matching Nvidia's success in AI training.

Despite the challenges, AMD remains a strong contender in the AI and data center markets. The company's AI revenue is expected to reach $9.5 billion in 2025, up from $5.2 billion, driven by the MI325X GPU, which competes with Nvidia's H200. Additionally, AMD's server revenue is expected to grow 10% year-over-year to $8.5 billion in 2025, fueled by the Turin chips outperforming Intel's Granite Rapids.

NVDA, AMD Total Revenue QoQ growth value

Analysts remain bullish on AMD's long-term prospects, with a consensus of 31 Wall Street analysts expecting the AMD share price to surge 47% in the next 12 months, reaching $184. However, the widening gap with Nvidia has led to a more cautious outlook for AMD's stock performance in the near term. Investors should closely monitor the developments in the AI and data center markets, as well as the progress of AMD's product roadmap and competitive positioning, to make informed investment decisions.

Comments

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NRG1788

01/08

$CCL Yesterday AM, a deep red candle appeared, breaking at the support near 23.55—the key level since the first week of Nov. The candle stretched sharply, reaching slightly above 23. If I remember correctly, the gap was filled with stop-loss orders targeting the Nov support. The decline was quite shallow, and we saw a significant hammer reversal from the low. In my opinion, support still holds around 23.55, not the deeper dip observed yesterday. Today, we need a higher low overall. Although a green day following yesterday's hammer would be ideal, it might be challenging in this bearish market.

statisticalwizard

@NRG1788 Agree, CCL might bounce.

S_H_R_O_O_M_S999

$AMD reducing the price from $200 to $110 due to a decline in Q1? Seriously, what's going on here? They must think it's only worth half its previous value after just three months. 😂 #AMD #stockprice #marketupdate

TrendTracker

@S_H_R_O_O_M_S999 Yeah, markets be wild.

btcmoney420

$NVDA According to Citi, Nvidia's Blackwell is exceeding earlier expectations, as highlighted during its recent CES presentation. The company revealed its hybrid AI platform, which leverages its cloud-based GPUs to run massive language models. Citi has a Buy rating on NVDA shares, targeting $175, following their CES meeting with management. Analysts expect Blackwell to significantly surpass prior guidance, which could be worth several billion dollars. Additionally, Citi predicts Hopper and Blackwell's combined impact will continue to grow in the upcoming January quarter. Management identified four key trends: benefiting from the declining traditional compute market (estimated at $2 trillion), as they believe most workloads will eventually be accelerated; quantum computing being effective for small data problems like cryptography but not necessarily for large data AI issues; and management's belief that quantum computing will become truly beneficial within 15-30 years.

neurologique

$AMD doesn't participate in those stocktwits polls, and they're just tools that some hedge funds use to manipulate retail investors.

Jera_Value

@neurologique True, AMD doesn't participate in those polls, and it's up to us to do our own DD.

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