AMD (NASDAQ:AMD) shares hit an all-time excessive on Thursday as UBS boosted its value goal forward of the corporate’s fourth-quarter outcomes subsequent week.
AMD shares hit $184.92 earlier than closing at $180.33, up 1.1%. Shares have gained almost 140% over the previous 12 months.
The analysts mentioned that tactical setup round earnings is sophisticated considerably by AMD’s current rally, however nonetheless, they’re extra assured on AMD’s knowledge middle GPU income alternative and considerably raised their 2024 and 2025 estimates and value goal to $220, up from $135.
Recent channel and buyer checks confirmed their view that AMD has a agency demand dedication for greater than 400,000 MI300A/X items for 2024, the analysts mentioned.
This is a quantity that’s pretty per the place the analysts have seen demand since final summer season however they’ve been cautious of double ordering and not sure of provide.
The analysts added that after having gone again to a number of prospects and suppliers, they’re extra assured that these items are actual and AMD now has enough Chip-on-Wafer-on-Substrate capability to do over 10% the volumes of Nvidia (NVDA).
Even assuming a really conservative common promoting value (which may very well be as excessive as $20,000 or extra for some prospects), this means $5B for knowledge middle GPU income is a pedestrian goal for this yr. Even this suggests AMD exits the yr at a run-rate which may very well be near $10B per yr with AMD nonetheless more likely to develop GPU items quarter-over-quarter via a lot of 2025, the analysts added.
UBS now sees AMD annualizing greater than $6 in earnings per share exiting the yr and pushing an annualized charge of $8 per share as soon as it will get to the second half of 2025.
AMD is scheduled to report its fourth-quarter outcomes on Jan. 30. Meanwhile, Microchip Technology (NASDAQ:MCHP) is slated to report its fiscal third-quarter outcomes on Feb. 1.
The agency additionally raised its value goal on Microchip Technology’s (MCHP) shares to $105 from $90.
Advanced Micro Devices (AMD) has a Hold ranking at Seeking Alpha’s Quant Rating system, which constantly beats the market. Meanwhile, the Seeking Alpha authors’ common ranking is extra constructive with a Buy and so is the typical Wall Street analysts’ ranking, Buy.