AMD (NASDAQ:AMD) shares rose more than 7% intra-day today after Piper Sandler analysts named the company as their top large-cap pick for the second half of 2024, following positive discussions with the chipmaker’s management.
The investment bank was particularly impressed with AMD’s strategy and market positioning, especially regarding the MI300 accelerator series, which is projected to exceed $4 billion in sales this year. AMD plans to launch new chips, including the MI325 later this year and the MI350 in 2025. These new chips will feature next-generation HBM3E memory, with the MI350 also incorporating CDNA4 and a 3nm process node to compete with the Blackwell architecture. The MI400, set for release in 2026, is expected to compete with Rubin.
Piper Sandler highlighted that AMD boasts over 100 customers, including tech giants like Microsoft, Meta, and Oracle. Notably, AMD has successfully run ChatGPT’s latest model, which features a trillion parameters.
In addition to advancements in AI chips, Piper Sandler expects positive developments in AMD’s server and PC businesses. The firm noted that AMD’s embedded segment is anticipated to hit its lowest point in the June quarter, setting the stage for growth in the latter half of the year.
Given these favorable conditions and the broad customer base in the AI accelerator space, Piper Sandler named AMD a top pick in the large-cap category, with significant customer ramp-ups expected in the second half of the year. The analysts also pointed out that GPU supply for AMD is expected to improve to meet high demand, and they believe AMD’s current valuation is attractive compared to its computing industry peers.