TLDR
- AMD stock jumped 9% on Monday as investors showed delayed enthusiasm for AI chips unveiled at last week’s “Advancing AI” event
- Piper Sandler raised AMD’s price target to $140 from $125, citing excitement over the new Helios server rack architecture
- Analysts believe Amazon Web Services could announce a partnership with AMD in the future after AWS sponsored the AI event
- AMD’s new MI350 series AI accelerators and Helios rack-scale system are designed to compete with Nvidia’s offerings
- Bank of America analysts expect AMD to gain market share as Nvidia struggles to meet all AI chip demand
AMD shares climbed nearly 9% on Monday. The jump came as investors finally showed enthusiasm for the company’s new AI chips unveiled last week.
The stock surge made AMD one of the top S&P 500 gainers. Only Estee Lauder performed better on the day.
Piper Sandler analysts raised their price target to $140 from $125. They maintained an “overweight” rating on the stock.
The analysts said they were “enthused” by AMD’s newly unveiled Helios server rack architecture. They called it “pivotal” for AMD Instinct GPU growth.
AMD introduced its Instinct MI350 series of AI accelerators at Thursday’s “Advancing AI” event. The company also revealed its next-generation Helios rack-scale system.
Mizuho Securities analyst Jordan Klein noted that investors “seem to be chasing” the developments now. The announcements initially “seemed to be more as expected” at the event.
AMD’s stock actually ended lower on Thursday. It fell again on Friday despite the new product announcements.
Delayed Market Reaction
Kevin Cook from Zacks Investment Research explained the delayed reaction. He said investors spent late last week nervous about Iran-Israel tensions.
“Investors got two things over the weekend,” Cook said. “Time to digest everything AMD and Lisa Su unveiled, and also a little bit of calming in the Middle East.”
Cook believes AMD has room to grow market share. He pointed out that “Nvidia can’t meet all the demand” for AI chips.
The Helios AI rack architecture will use AMD’s next-generation graphics processing units. It represents the company’s complete roadmap for AI solutions.
Dave Altavilla from HotTech Vision said the system shows AMD’s “blueprint for complete, rack-scale solutions.” He called this vital to compete with Nvidia.
Amazon Partnership Speculation
Analysts are buzzing about a potential Amazon Web Services partnership. Both Cook and Klein mentioned excitement about AWS becoming a new AMD customer.
Bank of America analysts noted that AWS was “a key sponsor” of the AI event. They expect a partnership announcement in the future.
AWS typically announces new partnerships at its own events. This makes a future reveal likely, according to Bank of America.
AMD pointed to an existing statement about AWS. The company said AWS “continues to be a strong CPU partner” and they’re “doing a lot of work with them on AI solutions.”
Bank of America maintained a “buy” rating with a $130 price target. The analyst consensus price target sits around $124.
Bernstein Research analysts said they were “modestly encouraged” by AMD’s offerings. They see the company working to close gaps with Nvidia.
The analysts noted that AMD’s MI355 chips seem solid. However, they believe the chips will still struggle against Nvidia’s rack-scale offerings.
Bernstein said the MI450 series will be the real test. Those chips are still at least a year away from release.
AMD highlighted partnerships with OpenAI, Meta, Oracle, and Microsoft at the event. The company positioned itself as a viable alternative to supply-constrained competitors.
The Helios system is expected to launch in 2026. It will combine next-generation AMD MI400 chips into larger systems.
