AMD Stock Forecast: HSBC Bullish on AMD, Predicts AI Revenue Surge
In a recent note to clients, HSBC expressed optimism about AMD (NASDAQ:AMD), highlighting the potential for significant upside in AI-driven revenue that the market may not fully appreciate yet. The bank's analysts believe that AMD has the opportunity to close the gap with industry leader Nvidia (NASDAQ:NVDA) in the AI GPU space by fiscal year 2025 (FY25), presenting an attractive risk/reward proposition.
HSBC maintains a Buy rating on AMD, setting a target price of $200, indicating a potential 43% upside. Despite being a distant second to Nvidia currently, AMD has the potential to narrow the AI gap with Nvidia, especially with Nvidia's recent roadmap shift and ZT acquisition in FY25.
The bank believes that the market is underestimating AMD's potential in the AI space, forecasting AI revenues of $6 billion for AMD in 2024 and $12.3 billion in 2025, surpassing consensus estimates. The upcoming MI325X GPU from AMD, expected to launch in the second half of 2024, could enhance competitiveness against Nvidia's H200 GPU, leading to further revenue upside for AMD.
One key driver of HSBC's optimism is Nvidia's adjustments to its AI GPU roadmap, which could open opportunities for AMD to narrow the competitive gap. Additionally, AMD's acquisition of ZT Systems is seen as a strategic move that could accelerate the development of rack-scale infrastructure, providing a competitive edge.
HSBC's scenario analysis suggests that AMD's AI GPU revenue in 2025 could reach $12.3 billion, with a best-case scenario of $15.1 billion. This outlook is significantly higher than consensus estimates, indicating a bullish stance on AMD's growth potential in the AI space.
In conclusion, HSBC's bullish outlook on AMD highlights the company's potential for growth in the AI GPU market, with the forecasted revenue surge in 2025. Investors may want to consider AMD as a potential investment opportunity, especially given the bank's Buy rating and optimistic target price of $200. Keep an eye on AMD's developments in the AI space, as they could have a significant impact on the company's future performance and stock price.