Ahead of tomorrow's earning report, a quick hit from Barron's, January 29:
Advanced Micro Devices got a show of support last week when Elon Musk said he would buy its chips to power artificial-intelligence efforts at Tesla. Wall Street is betting its earnings will provide further proof of AMD’s AI chip potential.
AMD stock was up 1.8% at $180.44 in premarket trading on Monday. That continued the movement seen after market hours last Friday when Musk said on social-media platform X that Tesla would buy the company’s chips, while also spending more than $500 million on Nvidia hardware this year.
Musk didn’t give a comparable figure for potential spending on AMD’s products but it still looked like good news for its MI300 data-center chips, the company’s main AI hardware offering. There could be more good news coming.
AMD will report its fourth-quarter earnings on Tuesday and most of the attention will be on its guidance. AMD CEO Lisa Su has previously said she expects the MI300 chip to generate around $2 billion in revenue in 2024. Susquehanna analyst Christopher Rolland thinks that could be raised to more than $3 billion at the least, with potential for around $6 billion.
“Our experts suggest AMD’s software capability has significantly improved their competitiveness vs. [ Nvidia software] CUDA, which has been a hindrance in the past,” Rolland wrote in a research note on Monday.
Rolland raised his target price on the stock to $210 from $170, keeping a Positive rating.
Rolland isn’t alone in his optimism. Stifel analysts led by Ruben Roy last week upgraded their target price on AMD to $200 from $170, while reiterating a Buy rating on the stock. They also focused on the potential for the MI300 chip....
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AMD is expected to release Q4 and year-end numbers at 5:00pm EST January 30, 2024.
