© REUTERS AMD (AMD) upgraded to buy at New Street as it stands out in data center AI chip sector
New Street Research upgraded shares of AMD (NASDAQ:) to Buy with a $215 per share price target in a note to clients Wednesday.
The firm said its analysis shows upside for all names in the data center AI chip sector, with AMD and TSMC standing out at each end of the risk spectrum.
“Lisa Su, CEO of AMD, pitched late last year a target addressable market for datacenter AI chips of $400bn. Lisa is to be taken seriously; this forecast might eventually prove wrong, but it was certainly not pulled out of a hat,” noted New Street.
The firm believes AMD is the best way to play a fast adoption scenario, which is a scenario whereby $400 billion is spent on chips in 2027, and demand grows faster than supply. AMD has the most valuation and expectation upside, according to New Street.
With the CPU market shares stabilizing beyond 2024, Intel and AMD are both growing 3% per annum, the firm also noted.
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