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Semiconductor stocks are off to a flying start this week, with AMD (NASDAQ:AMD) leading the charge.
Barclays Boosts AMD
AMD witnessed a staggering more than 8% surge in its shares, reaching levels not seen since 2021, early Tuesday morning. The impetus for this meteoric rise was Barclays’ decision to elevate its price target to $200 from $120, underlining the unprecedented demand for artificial intelligence, and its subsequent positive impact on sales.
Analysts at the firm articulated their bullish stance, predicting an approximate $4B AI run-rate for AMD exiting from ’24 with expectations surging to over $7B for ’25. Emphasizing a 40% Q/Q growth in Q3 and Q4, they pointed to the multiple customers across hyperscale and Enterprise, indicating a more 2H loaded model. Additionally, the unveiling of AMD’s MI300 accelerator in early December further bolstered their conviction.
Ripple Effects on Nvidia and Others
The optimism surrounding AMD also had spillover effects on its competitors. While Nvidia saw a commendable 2.5% spike in its shares, Intel experienced a marginal slip. Coherent, NXP Semiconductors, Western Digital, and Camtek also witnessed a surge after receiving upgrades by Barclays, mainly attributed to the “second wave of artificial intelligence.”
Analysts’ Growth Projections
The analysts, spearheaded by Tom O’Malley, conveyed bullish sentiments for the upcoming years, highlighting the pivotal importance of the ‘2nd Wave of AI.’ They expressed confidence in the anticipated positive inflection for most end markets in ’25 and advocated for selective investment into names leveraged to this trend.
Mixed performance and Apple’s Impact
Although the overall scenario appears buoyant, certain semiconductor stocks displayed a mixed performance. The news of Apple surpassing Samsung as the top smartphone maker in 2023 didn’t significantly affect smartphone linked-semiconductor companies, with a distinct lack of impact on their trading. Nevertheless, Apple’s decision to drop the price of its iPhone 15 in China exerted its influence on the market.
