AMD Stock Upgraded to Buy on AI Inference Growth Potential

Melius Research analyst Benjamin Reitzes has expressed optimism about AMD's growth potential in the AI inference sector, upgrading the stock's rating from "hold" to "buy" and raising the target price from $110 to $175. This move underscores the increasing importance of AI inference capabilities in the tech industry, as companies like AMD are positioning themselves to capitalize on this growing market.

Reitzes highlighted that the demand for AI inference is surging, leading investors to reassess the expected size of the GPU market from 2026 to 2028. He noted that investing in AMD's platform is becoming increasingly attractive for large-scale cloud service providers and sovereign entities. If his predictions hold true, AMD's stock has significant room for further growth.

Despite AMD's stock price already rising by nearly 25% this year, Reitzes remains confident that investors will gain stronger conviction in AMD's GPU prospects by the end of the year. He suggested that AMD might be in the middle of a historic stock price appreciation cycle.

AMD's strategic focus on AI inference technology is a key driver behind this optimism. The company has been investing heavily in developing advanced AI inference solutions designed to handle complex computational tasks efficiently. These solutions are ideal for applications requiring real-time processing and high performance, positioning AMD strongly in the market.

This strategic move aligns AMD with the broader industry shift towards AI-driven solutions, which is expected to drive significant growth for the company. As the demand for AI inference capabilities continues to rise, AMD's advanced technology and strategic investments make it well-positioned to compete with other major players in the market. This could lead to increased revenue and profitability, making AMD an attractive investment opportunity for those looking to capitalize on the growth of AI inference technology.

In summary, Melius Research's upgrade of AMD's rating to "buy" reflects the company's strong potential in the AI inference sector. With its strategic investments and advanced technology, AMD is well-positioned to capitalize on the growing demand for AI inference capabilities, making it a compelling investment opportunity.