Advanced Micro Devices (AMD) continues to strengthen its competitive position in the semiconductor industry, with Benchmark analyst Cody Acree reaffirming a Buy rating and a $170 price target. Acree’s renewed confidence comes after a discussion with AMD’s CFO, Jean Hu, highlighting the company’s growing momentum in the AI market and its continued market share gains against Intel (INTC).
Accelerated AI Strategy with MI350 Launch
A key takeaway from the investor discussion was AMD’s accelerated timeline for the launch of its next-generation MI350 GPU, now slated for mid-2025. This adjustment moves up the schedule from the previously anticipated second half of 2025. The MI350 is expected to directly compete with Nvidia’s (NVDA) Blackwell GPUs, narrowing the competitive gap significantly.
Despite the launch anticipation, AMD projects flat Data Center revenue for the first half of 2025 due to seasonal softness and a pause in Instinct GPU purchases as customers await the MI350’s debut. However, the company remains focused on its GPU roadmap, with ASICs contributing only 20% to the total AI silicon opportunity.
Market Share Gains in Client and Server Segments
AMD is seeing robust momentum in its Client segment, gaining market share in both Desktop and Notebook markets. The company forecasts a mid-single-digit growth in the overall PC Total Addressable Market (TAM) for 2025 but expects its Client revenue to outpace the market due to a strong CPU portfolio and design wins.
The company also secured its first commercial client win with Dell Technologies (DELL), signaling broader acceptance in the enterprise market. In the Server segment, AMD’s EPYC processors continue to gain traction, supported by adoption from Cisco Systems (CSCO), Dell, and Super Micro Computer (SMCI).
Expanding AI Ecosystem and Cloud Collaborations
AMD’s growth in the AI sector is underscored by its partnerships with cloud giants. In Q4 alone, Amazon Web Services (AMZN), Alibaba (BABA), Google Cloud (GOOG, GOOGL), and Microsoft (MSFT) launched over 100 general-purpose and AI instances powered by AMD chips.
Notably, Meta Platforms (META) leveraged AMD’s MI300X to power its Llama 405B frontier model on meta.ai, while Microsoft used the MI300X for multiple GPT-4-based Copilot services. AMD’s ROCm software suite has also expanded, supporting over 100 customer engagements in AI.
Volume Production of MI325X and Strategic Acquisition
AMD commenced volume production of the MI325X GPU in Q4, boasting performance and Total Cost of Ownership (TCO) advantages over competing solutions, including Nvidia’s H100. Additionally, the company received regulatory approval for its acquisition of ZT Systems and plans to divest ZT’s data center infrastructure production capabilities.
Secured Capacity Amid Industry Constraints
Amid industry-wide capacity challenges, AMD confirmed that it has secured sufficient wafer capacity to support planned customer ramps through 2026. This strategic move positions AMD to meet growing demand across its product lines.
Strong Q4 Performance and Future Outlook
AMD reported a strong double-digit percentage growth in EPYC CPU sales during Q4, driven by high-volume deployments with key customers such as ServiceNow (NOW), Verizon (VZ), and Visa (V). The company’s strategic focus on AI and data centers, combined with competitive product launches, signals continued momentum into 2025.
With Benchmark analyst Cody Acree’s $170 price target, AMD’s stock is well-positioned for growth as it capitalizes on AI-driven demand and gains market share against competitors. As of the latest check on Tuesday, AMD shares were trading at $114.35, reflecting a 1.10% increase.
