AMD Aims to Close the Gap with Nvidia
Advanced Micro Devices (NASDAQ: AMD) is gearing up to compete with Nvidia (NASDAQ: NVDA) in stock returns, focusing on artificial intelligence chips. Nvidia currently dominates this market with a share estimated between 70% and 95%, leading to a 168% surge in its stock over the past year.
Bank of America’s Expectations
Bank of America analyst Vivek Arya sees an opportunity for AMD on October 10 at the Advancing AI event. Arya notes that past announcements during this event have significantly boosted AMD’s stock, hinting at positive outcomes this time.
Analysts anticipate that AMD could reach $5 billion in AI sales this year and potentially double that by 2025. Arya suggests that a credible path exists for AMD to secure a 10% market share in AI chips, which could lead to a substantial increase in sales and stock price.
Amy’s Price War Dilemma
Arya speculates that to achieve significant sales growth, AMD may need to engage in a price war with Nvidia, potentially impacting profit margins. Despite this risk, the analyst believes that strong sales growth could enhance AMD’s stock performance in the long run.
Analysts remain optimistic about AMD, viewing it as a ‘Strong Buy,’ with forecasts suggesting an 11% upside potential and a price target of $188.04.
