Advanced Micro Devices (NASDAQ: AMD) shares surged almost 6% on Wednesday following an upgrade from analyst Pierre Ferragu at NewStreet Research.
An analyst from NewStreet Research has elevated the rating of AMD shares from “neutral” to “buy.” This upgrade is significant, particularly in light of the current analyst consensus that maintains a moderate buy rating for AMD shares – a conclusion based on 30 opinions.
Ferragu has continued to uphold a price target of $215 for AMD stock, indicating a potential surge of 27% in the value of the stock. This target significantly overshadows the average analyst prediction of $151.26 per share.
Reasons Behind the AMD Stock Upgrade
The NewStreet Research analyst suggests that AMD is the prime option for those looking to capitalize on a rapidly evolving scenario. The analyst stated that AMD holds the most potential for valuation and expectation growth.
The analyst further explained that this fast adoption scenario aligns with AMD’s projection of a $400 billion expenditure on AI chips by 2027. This scenario paints a comprehensive picture, as described in the initial part of their series.
However, the analyst added,
“It is a scenario in which AI usage continues to grow faster than deployments, with spending on AI accelerated growing unabated.”
This suggests a future where the demand for AI continues to outpace its deployment, leading to an unceasing growth in AI spending.
Market Performance of Advanced Micro Devices (NASDAQ: AMD) Shares
On Wednesday, AMD stock saw a surge of 5.86%. The trading volume for the day was 124,554,918 (124.55 million) shares, which is notably higher than the average daily trading volume of 64.18 million shares.
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