AMD’s ‘Advancing AI’ Event Called ‘Largely Uneventful’

Advanced Micro Devices (AMD) introduced its latest AI data center processors and new PC and server chips at an event titled “Advancing AI 2024.” But Wall Street analysts said the event didn’t advance the story much for AMD stock.

At its analyst and media briefing on Thursday, the chipmaker discussed its AMD Instinct MI325X AI accelerators and next-generation networking solutions. It also launched its fifth-generation Epyc server central processing units and Ryzen AI Pro 300 Series PC processors.

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However, Oppenheimer analyst Rick Schafer called the “Advancing AI 2024” event “largely uneventful.” That’s because AMD management “recapped already well understood CPU/GPU product road maps,” he said in a client note.

Schafer reiterated his perform, or neutral, rating on AMD stock.

“We applaud the progress AMD has made with MI Instinct, growing a roughly $4 billion AI franchise from nothing in just 12 months,” Schafer said. “Unfortunately investor expectations have remained persistently out of reach.”

AMD management did not update its 2024 revenue target of $4.5 billion in MI300 series sales.

“Expectations for MI300 sales this year have gradually fallen from a high around $8 billion roughly six months ago to around $5 billion,” Schafer said.

Full Systems To Compete With Nvidia

At the event, AMD highlighted efforts to broaden its AI portfolio to deliver a more complete rack-level system to keep up with rival Nvidia (NVDA).

AMD also updated its forecast for the data center AI accelerator market. It now sees the total addressable market growing from $45 billion in 2023 to more than $500 billion in 2028. Its prior forecast was for $400 billion in 2027.

TD Cowen analyst Joshua Buchalter reiterated his buy rating on AMD stock with a price target of 210 after the event.

In a client note, Buchalter said the event lacked fireworks but showed AMD’s steady progress in the AI market.

“Lack of a splashy new data center GPU (graphics processing unit) customer or revenue target potentially disappoints some (misplaced) investor expectations, but shouldn’t distract from the consistent performance lifts and execution that is positioning AMD as the leading alternative to Nvidia” in the AI market, he said.

AMD Stock Gets Price-Target Hike

Elsewhere on Wall Street, Piper Sandler analyst Harsh Kumar maintained his overweight, or buy, rating on AMD stock and upped his price target to 200 from 175.

“We attended AMD’s Advancing AI 2024 and remain enthused about the company’s prospects particularly around its data center and GPU offerings,” Kumar said in a client note.

In morning trades on the stock market today, AMD stock rose more than 1% to 165.86. On Thursday, after the AI event, AMD stock fell 4% to close at 164.18.

AMD stock is on the IBD Tech Leaders list.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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