AMD Stock: One Investor Predicts $100 as the Bottom, While Wall Street Sees 30% Upside

Advanced Micro Devices (AMD) has been a notable player in the semiconductor industry, making strides against Intel and inching closer to Nvidia, particularly in the areas of AI and data center technology. Despite impressive growth in its data center segment, AMD has yet to match Nvidia’s dominance, especially in the AI chip market.

In its most recent earnings report, AMD announced record-breaking revenue, primarily fueled by success in data center sales. CEO Dr. Lisa Su described 2024 as a “transformative year” for the company. However, investor sentiment remains cautious, with AMD’s stock plummeting about 36% in the past year, leaving some stakeholders anxious about its future.

Investor Concerns: A Drop to $100?

Deep Value Investing, an influential investor, expressed a bearish outlook for AMD, predicting the stock will continue to slide until it hits $100—about 10% lower than its current price. While the investor acknowledges AMD’s long-term potential, including the expected launch of the MI350 AI accelerator in mid-2025, there is concern over the company’s delayed entry into the market compared to Nvidia’s already-in-production GB200 series.

Deep Value points out that the market may be waiting for a round figure like $100 to re-enter, as AMD navigates a highly competitive environment.

AMD’s Strength in Enterprise Servers

Despite concerns about AI, AMD has seen significant success in the enterprise server CPU market. The company now holds more than 50% of the market share among hyperscalers, positioning itself as a dominant player in the space. While the company may face short-term volatility, AMD’s stronghold in enterprise servers suggests potential for growth in the future.

What Wall Street Thinks

While some investors are wary, Wall Street remains cautiously optimistic about AMD’s prospects. With 21 Buy ratings and 11 Hold ratings, AMD has a Moderate Buy consensus rating. Analysts have set a 12-month price target of $150.35, signaling an upside potential of roughly 30% over the next year.

Despite the stock’s recent struggles, Wall Street believes AMD can recover, particularly due to its strong position in the data center and enterprise markets.

Key Takeaways:

• Stock Struggles: AMD’s shares have fallen 36% over the past year, despite revenue growth and data center success.
• Investor Sentiment: Some investors predict a further decline, suggesting that the stock could hit $100 before seeing recovery.
• Enterprise Server Dominance: AMD is performing well in the enterprise server CPU market, holding more than 50% market share among hyperscalers.
• Wall Street Outlook: Analysts have a Moderate Buy consensus on the stock, with a potential 30% upside based on the $150.35 price target.

While AMD faces steep competition, especially from Nvidia, its solid presence in the data center market offers hope for long-term growth. Investors should be mindful of short-term risks but keep an eye on AMD’s future potential, particularly as it continues to innovate in enterprise servers and data centers.

What do you think about AMD’s future? Would you buy now, or wait for the stock to drop? Share your thoughts and join the conversation.