‘AMD’s MI400 AI Chips Could Be a Game-Changer,’ Says Morgan Stanley

AMD (AMD) introduced its new MI350 AI accelerators at its AI event on Thursday, but Morgan Stanley says that the bigger opportunity lies in the chipmaker’s upcoming MI400 chips. Indeed, five-star analyst Joseph Moore explained that while the MI350 launch was expected, investors should focus on next year’s MI400 and MI450 rack-scale products, which could drive major growth if AMD delivers. Nevertheless, Moore kept an Equal-Weight rating and a $121 price target on the stock.

Interestingly, AMD’s event featured testimonials from companies like Meta (META), Oracle (ORCL), OpenAI, Microsoft (MSFT), Cohere, and HUMAIN. Moore said that although these comments were positive, they didn’t change the overall investment story. However, AMD’s preview of its MI400 chips and rack-scale architecture suggested that they could match Nvidia’s (NVDA) Vera Rubin line. In addition, the analyst highlighted that OpenAI CEO Sam Altman’s appearance was a key moment that supports AMD’s forecast of generating “tens of billions” in annual AI revenue.

While the event didn’t bring major hardware surprises, AMD pointed to the 25 acquisitions and investments it made over the past year, which, according to Moore, shows how resourceful AMD is. Still, Moore added that while AMD’s long-term AI potential is strong, current products don’t fully support that view yet, and that strong execution will be critical.

Is AMD a Buy, Sell, or Hold?

Overall, analysts have a Moderate Buy consensus rating on AMD stock based on 22 Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMD price target of $129.41 per share implies 10.6% upside potential.

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