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On Tuesday, Northland reaffirmed its confidence in shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), maintaining an Outperform rating and a $175.00 price target for the company's shares. Currently trading at $130.87, AMD has experienced a 7.83% decline over the past week, though InvestingPro data shows the company maintains a Fair overall financial health score.
The firm's outlook is based on expectations of AMD's strong performance in the upcoming years, particularly in 2025, due to its competitive edge in various key markets.
According to Northland, AMD is poised to increase its market share in the AI GPU segment, server CPUs, PC clients, and expects the negative impacts from embedded and gaming sectors to diminish.
As a prominent player in the Semiconductors industry with a robust gross profit margin of 52.12%, the firm attributes AMD's edge in the AI space to its product roadmap and total cost of ownership (TCO) advantages. Additionally, Northland believes that AMD's offerings for server and client CPUs are superior in the current market.
The firm also anticipates a robust PC refresh cycle, which could be stronger than previously modeled. This optimism extends into the calendar year 2026, with Northland rolling out estimates of $6.85 earnings per share on revenues of $39.5 billion.
While acknowledging the potential risks of a U.S.-China decoupling, Northland's analysis suggests that the upside potential for AMD outweighs these concerns. The firm's stance reflects a positive outlook on AMD's future performance and market position.
In other recent news, Advanced Micro Devices (AMD) has faced a potential setback in their AI chip sales due to AWS's hesitation to offer cloud access to AMD's MI300 series AI chips, citing a lack of customer demand.
Despite this, AMD's relationship with AWS remains robust, with AMD's CPU server chips still accessible through AWS's cloud service. On a different note, Chinese industry groups have cautioned local companies about purchasing chips from the United States, which could impact AMD and other major U.S. chip manufacturers.
Meanwhile, Northland has maintained an Outperform rating on AMD shares, forecasting a surge in PC demand by 2025 due to Microsoft (NASDAQ:MSFT)'s decision to end support for Windows 10. This could potentially contribute an additional $1.0 billion to $1.7 billion to AMD's revenue in the calendar year 2025. Furthermore, AMD has announced the appointment of Mr. Philip Carter as its new Corporate Vice President and Chief Accounting Officer.
In the realm of high-performance computing, AMD has powered the world's fastest supercomputer, El Capitan, demonstrating the company's commitment to advancements in this field. These are the recent developments concerning AMD.
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