Advanced Micro Devices Projects $45B AI Chip Market In 2023: Analysts Say Chipmaker 'Maturing Fast' After GPU Launch

Advanced Micro Devices, Inc. AMD shares rallied Thursday after the company announced the launched of its new GenAI chip.

Raymond James On Advanced Micro Devices

Analyst Srini Pajjuri maintained a Strong Buy rating while raising the price target from $125 to $140.

“AMD officially launched its Instinct MI300X Data Center GPU targeted for AI/ML workloads,” Pajjuri said in a note.

Microsoft Corp. MSFT, Oracle Corp ORCL and Meta Platforms Inc META took the stage with major server OEM customers, “highlighting the broad-based design win momentum,” he added.

“We are particularly encouraged by META’s plans to use MI300X for inferencing, as we believe internal workloads are important for sustained volume ramps in the near term,” the analyst stated. Meta’s comments suggested

“AMD’s Software is maturing fast,” he further said.

Goldman Sachs On Advanced Micro Devices

Analyst Toshiya Hari reiterated a Buy rating while lifting the price target from $125 to $137.

Advanced Micro Devices indicated a larger TAM (total addressable market) of $45 billion, versus its earlier estimate of $35 billion, Hari stated.

With broadening customer engagements and expectations of an acceleration in the rate of AI adoption, the company raised its Data Center accelerator TAM for 2027 from around $150 billion to around $400 billion, representing a CAGR (compounded annual growth rate) of more than 70%, he added.

Check out other analyst stock ratings.

Mizuho Securities On Advanced Micro Devices

Analyst Vijay Rakesh reaffirmed a Buy rating and price target of $130.

Although Advanced Micro Devices raised its AI/DC TAM to $400 billion, “there is some investor concern on AMD not raising its AI or overall 2024 outlook despite the higher TAM,” Rajesh wrote in a note.

“We are estimating AMD DC revs 1Q24E up 1% q/q (cons. $2.2B, down 3% q/q),” he added. ROCm development seems to be a top priority for the company to compete against NVIDIA Corp.’s NVDA CUDA, “which is the key competitive advantage over potential peers,” the analyst further stated.

Rosenblatt Securities On Advanced Micro Devices

Analyst Hans Mosesmann maintained a Buy rating on the stock.

“Lisa Su’s team put together one of the most impressive new product event/launches by our reckoning in the last decade, perhaps ever,” Mosesmann said.

“The AI/GPU accelerator MI300X launch was not just a speeds and feeds geek fest (it was that for sure, with AMD claiming superiority in AI inferencing), but an industry movement coalescing around the concept of “open” sourced technologies are preferred (demanded really), to address the insanely fast/accelerating life-changing thing that AI has become,” he added.

KeyBanc Capital Markets On Advanced Micro Devices

Analyst John Vinh reiterated an Overweight rating on the stock.

Advanced Micro Devices “announced its latest generation MI300X AI GPU with benchmarking comparisons claiming 1.2-1.3x more performant vs. NVDA's H100 GPU for inferencing workloads, and it sees performance parity with H100 on training workloads,” Vinh wrote.

“We're encouraged that AMD has released a competitive AI GPU within a massively fast-growing TAM, with endorsements by many high-profile customers,” he added.

AMD Price Action: Shares of Advanced Micro Devices had risen by 9.89% to $128.37 at market close Thursday.

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Photo: Via AMD.