Advanced Micro Devices (AMD) stock climbed over 4% on Monday after reports said the company will raise the price of its high-end AI chip, MI350 AI. Following the news, UBS Top analyst Timothy Arcuri reiterated his Buy rating on AMD and lifted his price target from $150 to $210. The new price target indicates a 21% upside from current levels. The analyst sees growing demand in both PC and data center markets, and stronger investor sentiment ahead of the Q2 print on August 5.
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UBS Sees More Upside for AMD Stock
The five-star analyst believes AMD’s decision to raise the price of its MI350 AI chip shows growing confidence in its product line. Recent reports claim that the chip’s price has gone up to $25,000 per unit, from $15,000 earlier. Even with this increase, the MI350 still costs less than Nvidia’s (NVDA) latest AI chips. Arcuri views the move as a sign of growing demand for AMD’s chips and believes they can now compete more directly with Nvidia’s in both performance and pricing.
Arcuri also noted that AMD’s PC and server businesses are showing signs of recovery. With demand picking up, he believes the company is well-positioned to beat Wall Street estimates when it reports earnings on August 5. He expects the company to further gain share in the fast-growing AI chip market over the coming months.
It is worth noting that Arcuri ranks 7 out of more than 9,900 analysts tracked by TipRanks. He has a success rate of 73%, with an average return per rating of 33% over a one-year timeframe.
What to Expect from AMD’s Q2 Earnings
Wall Street analysts expect AMD to report earnings of $0.48 per share for Q2, down 30% from the year-ago quarter. Meanwhile, analysts project Q2 revenues at $7.41 billion, according to the TipRanks Analyst Forecasts Page. The figure marks a year-over-year increase of about 27%.
Is AMD a Good Stock to Buy?
On TipRanks, AMD stock has a Moderate Buy consensus rating based on 26 Buys and 10 Holds assigned in the last three months. The average AMD price target of $147.84 suggests a downside potential of 14.87% from its current price. Year-to-date, shares of the company have gained about 43.8%.
