AMD Rises as Citi Sees Bigger GPU Opportunity

According to GuruFocus.com, shares of Advanced Micro Devices (NASDAQ: AMD) rose today after analysts at Citigroup upgraded the stock to Buy from Neutral, lifting the price target to $200 from $150.

Rating Change

Previously, Citi had a Neutral rating on AMD with a $150 target. After the upgrade, the rating is Buy with a $200 target, implying an upside of approximately 25% from the prior close.

Analyst Rationale

Citi analysts see AMD well-positioned to capitalize on growing demand for GPU processors in AI and data center applications. The report highlights that AMD may expand its market share in this segment, supported by new products like the MI300X. The company is also making progress in improving product performance relative to competitors.

Context

The upgrade comes amid recent volatility for AMD shares, which had declined about 10% over the past month before the upgrade. Other analysts, such as those at Morgan Stanley and Goldman Sachs, have mixed views; Morgan Stanley rates AMD Overweight while Goldman Sachs rates it Neutral. Citi's upgrade reflects growing optimism about AMD's AI prospects.

What to Make of It

Citi's upgrade boosts confidence in AMD's ability to compete in the AI chip market, but investors should monitor intense competition from NVIDIA and supply chain challenges.