Why Analysts, Retail Predict More Upside From Here
Most analysts viewed the OpenAI deal as signaling the potential broader adoption of AMD’s AI chips across OpenAI’s cloud service provider partners and among other players.
Advanced Micro Devices, Inc. (AMD) stock remained on retail traders’ radar as it hit a fresh closing high on Tuesday. After soaring by nearly 24% on Monday following the announcement of the OpenAI strategic partnership, the stock added 3.84% on Tuesday.
With Tuesday’s advance, AMD stock closed at a new high of $211.51, although it is trading off its all-time intraday high of $227.30, reached on March 8, 2024. The cumulative gain over the two sessions is about 29%. Signaling that the rally could extend, the stock rose modestly in overnight trading, according to Yahoo Finance.
AMD’s stock has now entered the ‘extremely overbought’ territory, given the 14-day relative strength index (RSI) currently at 81.16, according to Koyfin. A reading above 70 for the RSI suggests the stock could be ripe for a pullback.
Source: Koyfin
AMD received more love from Wall Street, with the stock snagging another bullish upgrade. DBS Bank upgraded AMD’s stock to ‘Buy’ from ‘Hold’ and assigned a $260 price target, the Fly reported. Piper Sandler, Truist, BofA, Evercore ISI, Morgan Stanley, Citi, UBS, Wells Fargo, Jefferies, Sifel, and Melius Research were among the firms that upped their respective price targets for the stock. The updated price targets ranged from $215 to $300, with the upper bound implying an additional 42% upside potential from Tuesday’s close.
Most analysts viewed the OpenAI deal as pointing toward potential broader adoption of AMD’s artificial intelligence (AI) chips across OpenAI’s cloud service provider partners and among other players. Specifically, Evercore ISI said the OpenAI deal could boost AMD’s 2027 earnings per share (EPS) by over $2 and 2028 EPS by over $4. Morgan Stanley, while sounding optimistic about the MI450 ecosystem, cautioned that the Lisa Su-led company needs to prove that it can deliver better return on investment (ROI) than Nvidia.
A user on X pointed out that AMD’s MI450 chips would utilize 2nm processor node technology, as opposed to Nvidia’s Rubin, which would use 3nm, giving the former a significant power and efficiency advantage.
On Stocktwits, retail optimism about AMD tempered a bit, dropping a few notches but stayed in ‘extremely bullish’ territory, while the message volume on the stream remained ‘extremely high.’ AMD is among the trending stocks on the platform.
A bullish user stated that the stock should be trading at least at $260 based on technical analysis.
Another user stated that a $300 stock price is around the corner, with the prediction aligning with the Street-high AMD price target.
AMD stock has climbed 75% for the year-to-date period compared to Nvidia’s 38% gain and the iShares Semiconductor ETF’s (SOXX) 32% jump.
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