Top analyst sets expectations for AMD shares ahead of the “Advancing AI” event

A big day is just around the corner AMD (NASDAQ:AMD) Diary that could potentially act as a catalyst for stocks. The chip giant's Advancing AI event takes place on Thursday (October 10) in San Francisco.

At last year's event in December, the Instinct MI300 series GPU/APU platform was unveiled while the company highlighted AI PCs and advancements in its ROCm software stack. Additionally, AMD increased its AI TAM (Total Addressable Market) forecast for 2027 from over $150 billion to over $400 billion.

Cantor's CJ Muse, an analyst ranked in the top 1% of Wall Street stock analysts, expects there will be similar product announcements at this year's event, including the official launch of its Turin data center CPUs, data center accelerator (MI325X ) and AI PCs (probably Strix PRO). Muse believes there may also be another AI TAM update planned, possibly extending into 2028-2030.

Looking at the bigger picture, the 5-star analyst sees the company well-positioned to record “sustained market share gains in both the CPU and GPU data center landscape” with a “compelling AI-driven portfolio.”

Muse believes AI TAM, valued at over $400 billion, represents a “huge opportunity” for the company. AMD may be a distant second to Nvidia in AI chips, but to achieve “significant stock value growth” the company doesn't need to come close to matching Nvidia's revenue; just capturing a portion of it should be enough . “Given customers' clear desire to secure a second source of GPU accelerators, all AMD needs to do is demonstrate a vision for pursuing market share above 10% and share will be rewarded,” Muse said.

It's worth noting that following last year's event, AMD shares rose 10% in the following session and ultimately ended the year up 26%. Ahead of this year's event, there are greater expectations and AMD needs to give investors more confidence in its technology roadmap. In this context, signs that AMD can achieve “inference design wins” with a broader customer base beyond key customers are likely to take center stage (rumor has it that Amazon and Google are presenting, which is a good sign). “If mgmt. “We can do a good job here,” Muse concluded, “AMD shares should outperform through today and likely for the remainder of 4Q24E and into 2025E.”

As for potential catalysts, Muse believes any developments that increase confidence in AI GPU sales rising to over $12 billion in 2025 could push the stock price toward the $200 mark.

Currently, Muse maintains an Overweight rating on the stock and sets a $180 price target, meaning the stock will see 5% growth in the coming months. (To view Muse’s track record, click here)

At $188.04, the Street's average target is slightly higher and takes into account one-year growth of about 10%. Overall, the stock receives a Strong Buy consensus rating based on a mix of 25 Buys vs. 6 Holds. (See AMD stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important to do your own analysis before investing.