AMD's stock price target is elevated by the analyst due to the company's significant advancements in AI technology.
AMD Receives HSBC Upgrade as Saudi Arabia-U.S. Agreement Signals Long-Term Opportunities
Shares of Advanced Micro Devices (AMD) saw a notable boost on Tuesday following an upgrade by HSBC Global Research. The analyst, Frank Lee, CFA, raised AMD's rating from 'Reduce' to 'Hold' and significantly increased the price target from $75 to $100.
The revised outlook comes in response to two significant factors favoring AMD. First, the Trump administration's recently announced $600 billion investment agreement with Saudi Arabia, while still awaiting specific details, could present a substantial long-term opportunity for AMD, particularly as Saudi Arabia intensifies its expansion in artificial intelligence (AI) and semiconductor infrastructure.
According to Lee's research note, the potential market scope of this deal makes it compelling. However, HSBC cautions that the immediate earnings impact for 2025 remains uncertain, thereby adopting a cautious stance with a 'Hold' rating instead of a more optimistic 'Buy.'
Another catalyst for AMD is the easing of tariff pressures, which have lessened headwinds from the company's international supply chain and may offer margin relief in the latter half of the year.
HSBC also pointed toward AMD's upcoming AI chip roadmap as a reason for a less bearish near-term trajectory. Although Nvidia currently dominates the headlines in the AI accelerator race, AMD is gradually positioning its MI300 series to compete effectively in crucial data center deployments.
As of Tuesday's close, AMD shares were trading at $114.56, marking a 3.85% increase on the day and a significant 18.85% surge over the past month. The uptick in investor optimism surrounding AMD's role in the AI supply chain and its geopolitical alignment may eventually translate into solid gains for the company, even though near-term fundamentals may remain unpredictable.
- The Trump administration's investment agreement with Saudi Arabia, focusing on artificial intelligence (AI) and semiconductor infrastructure, opens up a potential long-term opportunity for investing in AMD as a business, given the technology involved.
- AMD's Company's AI chip roadmap, particularly its MI300 series, positions it competitively in the technology sector, attracting investor interest in the realm of AI finance and technology.
