AMD 'Serious AI Contender' With Sights On Over $500 Billion TAM, Billions In Revenue: Analyst

Wall Street is holding firm on its ratings for Advanced Micro Devices (NASDAQ:AMD) after Thursday’s Advancing AI event in San Jose.

AMD has garnered positive reviews from Wall Street following the AI event, with analysts from Bank of America Securities (BofA), Rosenblatt, and Benchmark Equity Research all reiterating Buy ratings.

The event showcased AMD’s aggressive push into the artificial intelligence market, highlighted by the official launch of its MI350 series of accelerators and a detailed roadmap for future generations, positioning the company as a credible competitor to Nvidia.

Also Read: AMD Acquires Another Company To Expand AI Arsenal

Rosenblatt analyst Kevin Cassidy maintained a Buy rating on AMD with a $200 price forecast. Benchmark analyst Cody Acree reiterated a Buy rating and a $170 price forecast. BofA Securities analyst Vivek Arya also maintained a Buy rating, with a price forecast of $130.

A clear consensus among the analysts is that AMD is successfully executing on its AI strategy, with a rapidly maturing product ecosystem and growing customer adoption.

The event featured endorsements from major industry players, including Microsoft Corp. (NASDAQ:MSFT), Meta (NASDAQ:META), OpenAI, and Oracle Corp. (NYSE:ORCL), bolstering confidence in AMD’s ability to capture a significant share of the burgeoning AI market.

CEO Lisa Su began the AI keynote by discussing the demand surge for inference compared to nine months ago, Kevin Cassidy noted.

The clear and aggressive roadmap, with the MI350 series available now, the MI400 in 2026, and the MI500 in 2027, provides visibility and demonstrates AMD’s commitment to rapid innovation, Cody Acree noted.

“AMD made several significant announcements, the most notable in our opinion was the official launch of its much-anticipated Instinct MI350 Series, which is said to be in production and shipping to lead partners, with its volume revenue ramp expected to begin in the third quarter,” Acree mentioned in the report.

The company announced rack-scale systems for MI350, MI400, and MI500 accelerators, which combine Instinct GPUs, EPYC CPUs, Pensando NICs, and ROCm software to compete directly with Nvidia Corp’s (NASDAQ:NVDA) NVL72 systems. It further announced its latest ROCm 7 software platform, AMD’s answer to Nvidia’s CUDA platform.

AMD is now estimating its AI accelerator TAM to exceed $500 billion, with a greater than 60% CAGR, versus its prior estimate of simply $500 billion. The company also announced that with its new Instinct MI350 Series, it has exceeded its five-year goal set in 2021 to improve the energy efficiency of AI training and high-performance computing nodes by 30x by 2025, ultimately delivering a 38x improvement.

With this achievement, AMD has now set a new five-year goal to deliver a 20x increase in rack-scale energy efficiency by 2030 compared to 2024. With the acquisition of ZT Systems, AMD can assemble all components for rack infrastructure and is planning multiple generations.

Both Benchmark’s Cody Acree and Rosenblatt’s Kevin Cassidy are projecting second-quarter revenue of $7.4 billion and earnings per share (EPS) of $0.47.

Bofa Securities emphasized AMD’s “continued execution in its AI roadmap” and the “customer/ecosystem proliferation.” Arya noted that the new MI355X accelerator is roughly on par with Nvidia’s B200, signaling a competitive performance landscape.

While an official announcement from Amazon Web Services (AWS) was absent, Bofa Securities estimates “ongoing engagement” and is comfortable with its forecast for AMD to secure a low-to-mid single-digit percentage of the AI market share in 2025 and 2026.

Cassidy was particularly impressed by AMD’s commitment to an “open architecture,” which the analyst believes will be a key differentiator. This strategy encompasses open software with ROCm, scalable networks, and support for various large language models (LLMs). Cassidy affirmed the view that AMD has firmly established itself as a serious contender in the AI compute space.

The analyst highlighted AMD’s alignment with a broad range of influential partners, including x.AI and its engagement with 40 sovereign AI initiatives, as a driver for “billions of profitable revenue.” Cassidy recommends owning AMD shares for its leadership in AI CPUs and its “fast follower” position in AI accelerators.

Price Action: AMD stock is trading lower by 0.96% to $117.36 at last check Friday.

Read Next:

• AI Momentum Powers Nvidia, Arm And Chip Supply Chain In BofA Recap

Photo via Shutterstock