MW AMD is doing better in AI than Wall Street thinks, this analyst says

By Therese Poletti

Benchmark sees better competitive stance in both artificial-intelligence chips and the PC market

After Advanced Micro Devices Inc.'s disappointing earnings forecast last quarter, Wall Street soured a bit on the company's potential in the artificial-intelligence-chip market, but Benchmark Research believes in AMD's increasingly competitive stance.

Benchmark analyst Cody Acree reiterated a buy rating on AMD $(AMD)$ Tuesday, with a stock-price target of $170, after hosting a recent fireside chat with AMD Chief Financial Officer Jean Hu.

"We came away with further conviction in the company's strong fundamental position," Acree said in a note to clients. That includes its "increasing competitiveness in the AI market" and continued market-share gains in both PCs and servers against rival Intel Corp. $(INTC)$, he said.

Last quarter, AMD's data-center revenue came in below Wall Street's expectations and the company stopped giving a separate forecast for its AI chips, fueling concern among analysts.

But it also said it was moving up the launch of its next-generation AI chip, the MI350, to mid-2025 from the second half of 2025. The combination of AMD's slightly earlier product launch, combined with Nvidia Corp.'s $(NVDA)$ past delay of its Blackwell chips, was a positive for AMD and "shows that AMD is closing the competitive gap," Acree wrote.

In addition, Benchmark was enthusiastic about AMD's market-share gains in the server market and noted that the recent addition of the corporate PC business of Dell Technologies Inc. $(DELL)$ would further boost its share.

"Dell's ramp alone should drive a material increase in the company's commercial PC market share," Acree said.

He also addressed recent comments by Intel that had made Bernstein Research and investors nervous that PC makers were buying up a lot of chip inventory ahead of Trump's anticipated tariffs on goods made in China. Acree said AMD was not seeing the same phenomenon.

"AMD has not seen any evidence of customers buying additional volumes in [the fourth quarter] ahead of anticipated Trump administration tariff increases, [contrary] to comments recently made by Intel during its last earnings call," Acree wrote.

In early market trading, shares of AMD were up slightly. Its shares hit a 52-week low after its disappointing report earlier this month.

-Therese Poletti

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 18, 2025 09:57 ET (14:57 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.