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AMD’s Upcoming Advancing AI Event: Will It Boost Stock Prices and Investor Confidence?

Hannah Perry | October 9, 2024

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AMD’s Stock Set for Major Catalyst: Can It Live Up to the Hype?

Upcoming Advancing AI Event to Drive Expectations

Advanced Micro Devices, Inc. (AMD) is gearing up for a significant event that could act as a catalyst for its stock performance. Scheduled for Thursday, AMD’s Advancing AI event has already captured the attention of investors expecting an array of product announcements, particularly surrounding the new MI325X artificial-intelligence accelerator. This event is prompting discussions across the financial landscape about the potential implications for AMD’s stock.

Recap of Last Year’s Rally

Last year’s Advancing AI event sparked a notable rally in AMD shares, which rose by 10% the day after the event and went on to outperform both Nvidia Corporation (NVDA) and the broader PHLX Semiconductor Index (SOX). Cantor Fitzgerald analyst C.J. Muse pointed out that investors are now facing heightened expectations, and AMD will need to instill greater confidence regarding its technology roadmap to avoid disappointing the market.

Key Areas of Focus for Investors

As anticipation mounts, key areas of focus for investors will include:

– **Securing Inference Design Wins**: Investors will be closely monitoring AMD’s ability to secure design wins with a wider array of customers beyond its existing key partnerships.

– **Potential Presentations from Major Players**: Speculation remains about whether tech giants like Amazon Inc. (AMZN) or Alphabet Inc. (GOOG, GOOGL) will present at the event. Such presentations could serve as a strong endorsement of AMD’s technology.

– **Financial Guidance and Market Estimates**: Investors could react positively to a new estimate of AMD’s total addressable market in AI, projected out to 2030. This strategic insight will be vital as the technology landscape evolves.

Muse highlighted that if AMD can indicate its AI GPU revenues might grow to over $12 billion by calendar 2025, this could support significant earnings power, potentially valuing AMD’s stock at around $200. Currently, he rates the stock as a buy with a price target of $180.

Current Stock Performance and Comparisons

Despite last year’s triumph, AMD has underperformed compared to Nvidia in 2023, with its shares rising only 15% year-to-date, while Nvidia’s stock has skyrocketed by 155%. In contrast, the PHLX Semiconductor Index has seen a 24% rally. This year could be pivotal for AMD as it strives to regain momentum.

Expectations on Server Announcements

Emphasizing AMD’s broad exposure to the AI market, Melius Research analyst Ben Reitzes stated that they anticipate a comprehensive presentation that will cover everything from PCs to x86 servers and GPUs. One area to watch will be AMD’s Turin server announcements, as the company aims to capture market share from competitors like Intel Corporation (INTC). According to Reitzes, the Turin momentum is expected to gradually become evident by 2025, particularly through hyperscaler and enterprise growth.

Conclusion: Eyes on the Future

As the Advancing AI event approaches, the stakes continue to rise for AMD. Investors are not just looking for product announcements; they are also seeking assurance that AMD can navigate the increasingly competitive landscape of artificial intelligence and semiconductor technology. With heightened expectations and a roadmap critical to its future performance, all eyes will be on AMD this Thursday. Should the company deliver on its promises, it may see its shares rally again, potentially positioning it as a key player in the evolving semiconductor industry.