Morgan Stanley hiked its Advanced Micro Devices, Inc. (NASDAQ:AMD) price target to $102 from $87 per share in a note Monday, maintaining an Overweight rating on the stock.
Analysts told investors that they are trimming AMD data center numbers as "cloud remains weak," but they still see improvements in the second half.
AMD is set to report earnings for its latest quarter after the close on Tuesday, May 2.
"Cloud digestion remains a negative factor in 2q, as inventories are high and spending remains in digestion mode; enthusiasm for AI is actually a modest negative for spending on traditional servers in 2q as budgets are becoming readjusted," the analysts wrote.
"We do see a partial offset as PC recovers slightly from the severe inventory correction in 1q, but overall our estimates do come down. Overall for 2q, we see data center up slightly q/q, gaming down slightly, PCs up 14% (but still down 55% y/y), and XLNX up 2% q/q (expecting a 6% correction in 3q). Beyond 2q we do have data center and PCs continuing to recover through 2h," they added.