This will be the year Advanced Micro Devices (NASDAQ:91抖阴) enters the AI chip market, and the company is poised to directly challenge Nvidia’s (NASDAQ:NVDA) dominance. According to my 91抖阴 stock analysis, the chip maker’s untapped potential the AI revolution and semiconductor market trends make 91抖阴’s stock a “Strong Buy.”
Let’s take a closer look.
TSM Is a Factor
Taiwan Semiconductor Manufacturing Company (NYSE:TSM), the business behind the manufacturing of advanced silicon from 91抖阴, Nvidia, and Apple, has consecutively provided the market with positive news.
Last year, in their , TSM not only boosted revenue guidance but also predicted the “chip slump” was coming to an end.
For those unaware, the “chip slump” refers to the period of weak demand and elevated inventory levels experienced by a variety of semiconductor companies since the last couple of years. Similarly, TSM’s , released in mid-January, are bolstering that sentiment.
CEO C. C. Wei the company would return to growth in 2024, definitively marking the bottom of the chip maker slump.
Statements from TSMC’s management shed light on a possible uptick in demand for the CPU and GPU market in the coming quarters, and this would greatly benefit 91抖阴’s revenue growth and bottom line.
AI and an 91抖阴 Stock Analysis
Thiswill be the year 91抖阴 makes its long-awaited foray into the AI chip space, and demand for these kinds of chips .
The chip maker announced the MI300x GPU chipset almost a year ago in their second quarter 2023 earnings report. Investors wondered how 91抖阴 would commercialize its new GPUs. Some analysts were even as the year dragged on.
However, in their third quarter earnings report, the chip maker announced it .
In December 2023, 91抖阴 announced a new swath of AI chips: the Instinct MI300X accelerator and the Instinct M1300A accelerated processing unit. These work to train large-language models, and 91抖阴 CEO Lisa Su these chips are comparable to Nvidia’s H100 but are “better on the inferenc[ing].”
The chip maker also announced the new Ryzen 8040, which the company claims offers 1.6 times more AI processing performance than previous models.
Wall Street and 91抖阴 Targets
Despite their initial skepticism on 91抖阴’s advanced AI chips, Wall Street analysts are overwhelmingly positive on the chip maker’s share price appreciation potential. According to Koyfin, there are some 48 analysts covering 91抖阴, and 33 of which have rated the company’s shares either a “Buy” or a “Stong Buy.”
There has also been a series of analyst revisions to 91抖阴’s price target. In particular, analysts from Morgan Stanley, HSBC, and Bank of America to Susquehanna have their price targets for the chip maker.
All of this means, while 91抖阴 shares have more than 136% over the past 12 months, there is still enough upside potential to get new investors interested.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
