Investment firm CFRA has upgraded its rating for semiconductor company AMD (AMD, Financial) from "Buy" to "Strong Buy," significantly increasing the price target from $125 to $165 per share. This positive news led to AMD's stock price rising nearly 6%. Analyst Angelo Zino highlighted three key reasons for this upgrade.
First, Zino anticipates a substantial shift in AMD's competitive landscape with industry leader NVIDIA (NVDA) by 2026. With plans to launch the next-generation AI accelerator MI400x and develop full-rack solutions, AMD aims to narrow its technological gap with NVIDIA. The acquisition of ZT Systems is expected to open new growth avenues for AMD, particularly boosting GPU sales.
In terms of customer ecosystem, AMD is accelerating its expansion in the AI sector. Beyond existing collaborations with tech giants like Oracle (ORCL) and OpenAI, AMD's open-source AI framework ROCm is evolving, strengthening its competitive technological ecosystem. This strategic approach is enhancing AMD's influence in the AI accelerator market.
On market trends, Zino emphasized the upcoming turning point in the GPU server market, predicting a strong recovery starting in the fourth quarter. As a key player, AMD is poised to benefit from industry growth. Additionally, the surge in AI computing demand and potential business opportunities in China offer significant growth prospects for AMD's long-term development.
