HSBC Upgrades AMD to 'Buy' with Street-High Price Target of $200

AMD stock has been upgraded to "Buy" by HSBC analyst Frank Lee, with a Street-High price target of $200, implying a 44.5% upside potential. The analyst's optimistic view is based on AMD's improved market performance in the GPU and CPU markets, as well as sustained demand for its next-generation MI355 AI GPUs and X86-based Servers. The company is set to release its Q2FY25 results on August 5, with the Street expecting adjusted EPS of $0.49 on revenues of $7.41 billion.

Advanced Micro Devices (AMD) stock has been upgraded to "Buy" by HSBC analyst Frank Lee, with a Street-High price target of $200. This implies a potential 44.5% upside from the current trading levels [4]. The analyst's optimistic view is driven by AMD's improved market performance in the GPU and CPU markets, as well as sustained demand for its next-generation MI355 AI GPUs and X86-based servers [1].

Lee has become increasingly optimistic about AMD’s long-term growth potential and its enhanced market performance in the GPU and CPU markets [2]. The analyst's previous upgrade from "Hold" to "Buy" in May was based on AMD's AI deal with Saudi Arabia and the easing of tariff tensions [1]. Despite the upgrade, Lee has not provided exact reasons for his bullish view on AMD, suggesting that the analyst's optimism is based on broader market trends and AMD's strategic positioning.

AMD is set to release its Q2 fiscal year 2025 (FY25) results on August 5. The Street expects adjusted EPS of $0.49 on revenues of $7.41 billion [2]. The company's recent performance has been robust, with a 21.71% revenue growth in the last 12 months and annual total revenues of $27.75 billion [2]. This financial strength is a key factor contributing to the analyst's positive outlook.

Despite the upgrade, AMD faces significant challenges in the AI and GPU markets. The company is competing with Nvidia, whose leadership in the AI space is supported by its strong software stack [2]. Additionally, the growing adoption of ARM-based processors and the increasing use of ASICs pose challenges to AMD's market share [2]. However, AMD's strategic focus as a fabless manufacturer of X86-based servers and custom SoCs has enabled it to make significant progress in the Server CPU and PC CPU markets [2].

In conclusion, HSBC's upgrade of AMD to "Buy" with a $200 price target reflects the analyst's optimism about the company's long-term growth potential. While AMD faces intense competition in the AI and GPU markets, its strong financial performance and strategic positioning make it an attractive investment opportunity. Investors should closely monitor AMD's earnings report on August 5 for further insights into the company's AI plan and revenue path.

References:
[1] https://www.investing.com/news/analyst-ratings/hsbc-upgrades-amd-stock-to-buy-on-ai-revenue-upside-potential-93CH-4130733
[2] https://www.techi.com/amd-stock-goldman-neutral-rating-ai-growth/
[3] https://www.investopedia.com/amd-s-latest-ai-chips-are-on-par-with-nvidia-s-blackwell-gpus-hsbc-says-11769625
[4] https://www.tipranks.com/news/amd-upgraded-to-buy-by-hsbc-with-street-high-price-target-stock-rises