Analyst updates AMD stock price forecast ahead of AI event

Lisa Su has two words for fogeys who think artificial intelligence is overhyped.

"Completely wrong," the Improved Micro Devices (AMD) chief executive said in the way forward for an interview with Time.

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"Having lived inside of the technology business for the last couple of decades, every 10 years or so we see a main arc in technology, whether it was once the starting place of the online or the starting place of the PC or the starting place of cellphones or the starting place of the cloud," she said.

Su said AI is greater than all those "relating to the way it truly is ready to with out a doubt impact our day to day lives, our productivity, our business, our research —all of those things."

"And we're on the very starting place of the cycle," she added.

Su said that folks who subscribe to the concept that AI is a bubble are thinking too narrowly as they seek a return on investment presently or over the following six months.

AMD CEO sees AI arc over the following 5 years

"I suspect you deserve to study this technology arc for AI over the following 5 years, and the way does it fundamentally change the entirety that we do?" she said. "And I with out a doubt trust that AI has that potential."

When she took over as AMD's top executive, Su said a main piece of the corporate's strategy was once to became a high-performance-computing leader.

Related: Analyst updates AMD stock forecast ahead of AI conference

"What makes this a fun job is the technology that we're working on is impacting the lives of billions of people," she said. "Plenty of the things that you do in a day, somewhere, it goes through an AMD processor."

Su said that almost all definitely the largest thing that sets the corporate's strategy apart "is that we with out a doubt trust in end-to-end AI in every aspect."

"There are companies in order to be working on some aspect of AI," she said. "Our view is, 'hey, AI is going to be everywhere. AI is going to be at some stage in our entire product portfolio.' "

In the midst of the interview, Su discussed AMD’s MI300X, a graphics-processing unit designed to beef up generative artificial intelligence technologies. Generative AI uses machine learning to derive original content from existing text, photos, video and audio.

"Once we launched our MI300X last year, we had Microsoft, we had Meta, we had Oracle, as key marquee partners that we have gotten come together and built great solutions [with], and it is the explanation what sets us apart in how we approach the market," she said.

And now AMD is asking people to avoid wasting the date of Oct. 10 when the corporate is scheduled to host “Advancing AI 2024.” Or not it is able to well be an in-person and livestreamed event designed to exhibit the following-generation AMD Instinct accelerators and Fifth Generation AMD EPYC server processors.

The gathering may also feature networking and AI PC updates,  highlighting AMD’s growing AI solutions ecosystem.

AMD's stock is up 147% year-to-date and a team of analysts at Bank of The u . s . a . of america led by Vivek Arya issued a research report in regards to the corporate ahead of the October event.

The firm, which maintained a buy rating and $a hundred and eighty price target on AMD shares, said that last's year AI event in December produced 19% to eighty% stock returns one to three months later.

Analyst: AMD can ride AI market

"AMD is off to a unprecedented start however it surely with out a doubt is ready to be more difficult to carve an even bigger niche between Nvidia's (NVDA) eighty% to Eighty five%+ share, cloud incumbency, 15 year+ software-developer lead on one extreme, and the roughly 10% market share presence of cost-optimized custom application-specific integrated circuits (ASICs) from Broadcom (AVGO) and Marvell Technology (MRVL) on the opposite extreme," B of A said.

If, nevertheless, AMD is ready to reveal a path to 10% AI share by calendar 2026, the corporate would conceptually add around $5 billion (on top of $12.6 billion) in sales, with scenario EPS of around $8 to $9, compared with the consensus at $7.37, the investment firm said.

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B of A said that AMD is facing competition now no longer just in AI.

The stock is also exposed to pressures from Intel (INTC) , near-term sluggish PC demand, longer-term rising competition from ARM-based rivals in servers and PC CPUs, and profitability in AI silicon as it becomes more difficult to raise prices or pass along the rising cost of high-bandwidth memory.

The firm noted that the timing of the AI event is interesting in that it takes place before AMD's scheduled earnings report — slated for the tip of October — "in what's frequently the quiet period for the corporate."

B of A said it was once asserting its buy rating because AMD can capitalize inside of the PC/server central-processing-unit market by taking share from Intel, which "remains in turmoil with frequent restructuring," and by riding the expanding AI market, "where the leader, Nvidia, continues to make bigger the addressable promote it is always in search of out alternative merchant and ASIC suppliers."

Last month, Wells Fargo affirmed an overweight rating on AMD with a $205 price target after the corporate said Oracle Cloud Infrastructure (ORCL) can be deploying the MI300X GPUs to power its most modern Oracle Cloud Infrastructure Compute Supercluster instance.

The investment firm said the news was once an "incremental positive." AMD's news release specially highlights the MI300X GPUs as well positioned for inference capabilities, a theme the corporate will emphasize at its Oct. 10 event, Wells Fargo said.

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