Sometimes, Mr. Market whispers, but other times, it straight-up roars.
This week, AI stock Advanced Micro Devices (AMD) found itself in the middle of the loudest buzz. That’s the kind that comes with a billion-dollar tailwind: a major shift in global trade policy.
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Its data-center business has already been booming, but now it’s onto bigger runways, courtesy of reopened doors in China.
Moreover, as the outlook shifts, a major Wall Street voice put its name on a call that’s its boldest yet on AMD stock.
AMD goes from underdog to AI infrastructure powerhouse
AMD kicked things off this year as an underdog in AI chips. However, its latest results show it’s far from playing catch-up anymore.
In the first quarter, AMD’s data-center sales surged 57% from last year, hitting $3.7 billion. That’s nearly 50% of the company’s total revenues, and a clear sign that its AI chips are getting real traction.
AMD’s EPYC CPUs and Instinct GPUs, especially the MI300 series, are owning the narrative.
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These chips are effectively shaping major data centers and getting strong reviews in the process. Some buyers even say AMD’s chips beat Nvidia’s when it comes to price and performance.
And AMD’s next move is arguably even bigger.
In June, it showed off the MI350 Series and a new rack system called Helios. It’s essentially a comprehensive full AI setup that includes CPUs, GPUs, networking, and cooling, all efficiently designed to work together out of the box.
AMD claims the MI350 delivers 40% more AI performance for every dollar spent in comparison to the previous version.
Major tech players are lining up.
Meta is already making use of MI300 chips for its AI models and plans to test the MI350 next.
Meanwhile, startup TensorWave recently built the largest AMD GPU system in North America, 8,192 chips pushing 21 exaFLOPS of power.
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What’s also helping AMD compared to, say, Nvidia, is that it’s betting on an open-source system called ROCm. That’s winning over cloud providers and companies looking for greater flexibility.
AMD stock gets green light to chase China’s AI boom
Bank of America analyst Vivek Arya is going big on AMD.
In a bold July 16 note, Arya hiked his price target on AMD stock from $130 to $175, a superb 35% jump.
Arya’s bullishness has everything to do with the massive policy reversal from Washington that’s likely to reshape the AI chip race.
The U.S. government is now allowing AMD and Nvidia (NVDA) to resume shipments of advanced AI accelerators to Chinese data center customers.
For AMD, that’s a massive shift in the right direction.
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It effectively reopens enterprise sales channels that were frozen by export controls. Also, this could unlock $500 million to $1 billion in revenues for AMD in just the next two quarters.
But it’s not just a short-term revenue bump.
The MI300 series and AMD’s next-gen MI400 chip are now back in business in arguably the most lucrative AI market.
China’s top cloud providers reportedly spend roughly 20% of global AI training dollars. That’s not a pool AMD wants to sit out of.
On top of that, the U.S. chipmaker gets to sharpen its competitive edge against both Nvidia and Chinese rivals like Huawei, on the back of favorable policy tailwinds.
Still, AMD must navigate supply chain hiccups, geopolitical uncertainty, and a testing competitive landscape.
However, if all goes well, the company is set for a multi-quarter AI growth run that could make its current validation a lot cheaper.
The $45-per-share hike in his target is easily the loudest Wall Street endorsement of AMD this year, underscoring a robust belief in the chipmaker’s long-term growth runway.
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