$Advanced Micro Devices (AMD.US)$ climbed to its highest since late 2021 Tuesday and $NVIDIA (NVDA.US)$ added to this year's rally after the companies and a few other chipmakers received price target boosts from KeyBanc Capital Markets.
AMD shares soared 8.3% to close at $158.74 -- only about $3 away from the stock's record close of $161.91 in November 2021.
Meanwhile, NVDA gained as much as 3.9% intraday to hit a $568.35 52-week high before partly pulling back to close at $563.82.
While analyst John Vinh maintained his Outperform ratings on AMD, Nvidia, $Arm Holdings (ARM.US)$, $Micron Technology (MU.US)$ and $Qualcomm (QCOM.US)$, he raised his price target on these stocks.
The upward adjustments are as follows:
Prior Price Target | Updated Price Target | Upside Potential | |
Nvidia | $650 | $740 | +35% |
AMD | $170 | $195 | +33% |
Arm | $65 | $75 | +15% |
Micron | $100 | $115 | +15% |
Qualcomm | $145 | $165 | +14% |
The Semiconductor Thesis: According to KeyBanc's supply-chain investigation, the findings were mixed, indicating overall weak trends in broad end-demand. There's inventory destocking in auto and industrial markets, the PC industry remains stagnant, iPhone trends are weak in China, and traditional server demand is also low, as mentioned by Vinh.
Android smartphone demand, however, has sustained, the analyst said. He also noted strong AI-related demand.
Vinh said he sees positive implications for AMD due to a meaningful inflection in demand for the MI300X AI accelerator, positioning the company on track to derive $8 billion in data center GPU revenue in 2024. Genoa server processor will likely continue to gain share vs. the Sapphire Rapids chip from$Intel (INTC.US)$ in 2024, giving AMD a 30-35% market share in servers, he said.
The implications for Nvidia are mixed, Vinh said, as he noted that the company lowered its AI forecast for the second half of 2024, likely due to its desire to diversify its CoWoS capacity. "Despite the reduction, NVDA's AI capacity is well in excess of Street estimates and enough to support over $100B in data center revenues in CY24," he said.