The Great Run of Advanced Micro Devices Continues

Shares of Advanced Micro Devices (AMD) are on an upward trajectory, driven by a positive outlook for the chip market and an optimistic assessment from analysts at TD Cowen.

Strong Growth Forecast

On Thursday, AMD saw a 2.4% increase, reaching $164.04 per share. This boost came after Taiwan Semiconductor Manufacturing (TSMC) announced its expectation of revenue growth this year to be more than double the rate of the broader chip market. TSMC is responsible for manufacturing AMD chips.

During trading hours, AMD briefly reached $167.19, potentially marking an all-time high for the stock. Should it close at this level or higher, it would be the first record close since November 2021, according to Dow Jones Market Data.

Bullish Perspective

TD Cowen analyst Matthew Ramsay expressed his confidence in AMD’s potential success in the artificial intelligence (AI) space. In a research note, Ramsay raised his price target for AMD shares from $130 to $185 and maintained his Outperform rating.

While acknowledging Nvidia’s position as the AI leader, Ramsay believes that AMD still has significant room for growth. He emphasized the potential of AMD’s MI300, a data center graphics processing unit designed for AI projects and applications, within the total addressable market. Ramsay anticipates substantial upside for AMD in the coming years as the GenAI alternative gains momentum.

Broad Analyst Support

Ramsay’s positive stance on AMD is shared by many analysts. According to FactSet, out of the 45 analysts surveyed, 32 consider the stock a Buy, while 13 rate it as a Hold.

KeyBanc Capital Markets analyst John Vinh also recently revised his price target for AMD to $195 from $170, maintaining an Overweight rating. Vinh anticipates demand for AMD’s MI300 to reach as high as $8 billion this year, exceeding his earlier expectations ranging from $3 billion to $4 billion.

Market Response

Following these developments, U.S.-listed shares of Taiwan Semiconductor rose 8.1%, while Nvidia saw a 2.2% increase.

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