AMD's AI Chip Breakthrough: Challenging Nvidia's Dominance in the AI GPU Market

This chipmaker is catching up to Nvidia and can soar 45%, HSBC says

Advanced Micro Devices' latest chip release has thrust the company back into the AI game with a potential to rival Nvidia, according to HSBC. Analyst Frank Lee upgraded the chipmaker to buy from hold with a revised price target of $200, which suggests a whopping 44.5% potential upside for the stock. Lee's previous price target on shares was $100. According to Lee, AMD's recently launched MI350 series has a significant pricing premium and performance upgrades that can compete with Nvidia Blackwell line -- specifically its latest-gen HGX B200 AI graphics processing unit. He wrote that he is now "turning bullish as we think AI GPU pipeline will surprise with higher-than-expected MI350 pricing premium." The impact of this MI350 pricing surprise could materialize as soon as the second half of this year, the analyst said. "With performance comparable to Nvidia's B200, we now believe the ASP for MI355 can be USD25k (vs previous assumption of USD15k)," he said. "We now expect that upside to FY26e AI revenue will lead to higher re-rating to AMD that is not fully priced in by the market despite the 14% share price rally post its AI day event." AMD during its June 12 Advancing AI event launched the AMD Instinct MI350 Series GPUs , which includes the Instinct MI350X and Instinct MI355X. The company is also planning to release its full-server Helios AI rack in 2026, which would be built on its next-gen Instinct MI400 Series GPUs. These chips would compete with Nvidia's Blackwell line of processors, AMD CEO Lisa Su said last month. Lee expects AMD has significant upside to its fiscal year 2026 AI revenue given the pricing premium of its MI350 line compared to Nvidia's offerings. The MI350 chips are also attractive as they can be deployed using existing data center infrastructure, he added. Shares popped 2% after the upgrade. Year to date, AMD has gained 14.6%.

AMD's Latest AI Chips Are on Par With Nvidia's Blackwell GPUs, HSBC Says

The performance of Advanced Micro Devices' (AMD) latest AI chips is on par with those from Silicon Valley rival Nvidia's (NVDA), HSBC analysts said. In a note Thursday, HSBC analysts upgraded their rating on AMD to a "buy" from a "hold" and doubled their price target to $200, noting that AMD's latest series of chips can compete with Nvidia's Blackwell GPUs. AMD launched its Instinct MI350 Series GPUs last month, claiming the chips offered four times more computing power than its previous generation. "With the recent launch of the MI350 series, we were pleasantly surprised with the performance upgrades which imply that the MI350 series can compete with Nvidia latest-gen HGX B200 AI GPU," HSBC analysts wrote. "Owing to the performance enhancements, the pricing premium is much higher than expected earlier which could help drive upside to earnings in 2025 and 2026." The analysts, led by Frank Lee, also wrote that there was further upside possible for AMD shares when the chipmaker launches its MI400 series next year, which could compete with Nvidia's next-generation Vera Rubin platform -- scheduled for the second half of 2026. AMD unveiled the MI400 last month in an event hosted by CEO Lisa Su and Sam Altman, CEO of OpenAI, which has signed on as a customer for the next-gen chips. AMD shares are rising more than 4% to $144 in early Thursday trading, having gained around a fifth of their value this year. Shares in Nvidia, which briefly became the world's most valuable company with an over $4 trillion market cap Wednesday, are little changed.

AMD Stock Is Rising Thursday: What's Going On? - Advanced Micro Devices (NASDAQ:AMD)

Shares of Advanced Micro Devices Inc. AMD are trading higher Thursday afternoon after HSBC upgraded the stock from Hold to Buy and set a $200 price target. What To Know: The firm cited significantly higher expectations for AMD's artificial intelligence revenue in fiscal 2026, projecting $15.1 billion compared to the current consensus of $9.6 billion, a 57% upside, according to Investing.com. The analyst at HSBC pointed to strong pricing traction for AMD's new MI350 AI chip series as the main driver behind the revised outlook. The upgrade marks a major reversal from HSBC's prior rating in January, when it downgraded AMD to Reduce on concerns over its competitive positioning and AI roadmap. Now, the firm sees those risks easing, with confidence in AMD's AI pipeline, including the MI400 rack architecture expected in 2026. Despite AMD shares already climbing 14% after the company's AI Day on June 12, HSBC said the market still hasn't fully priced in the potential re-rating from long-term AI growth. The stock currently trades at a P/E of 101 on a trailing basis and 37 on a forward basis, reflecting high growth expectations. The company's market cap now stands at $234 billion, according to Benzinga Pro. AMD is also in the spotlight ahead of its second-quarter earnings release, set for Aug. 5. KeyBanc recently projected that AMD could post $7-8 billion in AI revenue this year, led by strong demand for the MI355 series. Goldman Sachs on Thursday initiated coverage with a Neutral rating, noting AMD's success in gaining share in the server and PC CPU markets, but cautioning about competition from ARM-based rivals. Truist Securities remains more reserved, keeping a Hold rating and flagging uncertainty around whether some customers are buying AMD's GPUs mainly to push back on Nvidia's pricing power. Even so, datacenter demand for AMD remains healthy, with continued growth in its server deployments. With analyst sentiment shifting and AI growth expectations rising, AMD's stock is gaining momentum as investors reassess its role in the high-stakes battle for AI infrastructure leadership. AMD Price Action: AMD shares were up 3.66% at $143.47 at the time of publication, according to Benzinga Pro. Read Next: Elon Musk 's xAI Launches Grok 4 With 'PhD-Level' AI, Debuts In $300/Month 'SuperGrok' Tier Image Via Shutterstock. AMDAdvanced Micro Devices Inc$143.603.75%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum29.40Growth96.94Quality80.13Value13.57Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Why AMD Stock Is Surging Today | The Motley Fool

Advanced Micro Devices (AMD 4.10%) stock is seeing significant bullish momentum Thursday. The semiconductor company's share price was up 3.8% as of 3:30 p.m. ET amid the backdrop of a 0.3% gain for the S&P 500 (^GSPC 0.27%) and a 0.2% gain for the Nasdaq Composite (^IXIC 0.09%). The stock had been up as much as 5.4% earlier in the day's trading. AMD's valuation is climbing today following bullish coverage from HSBC. The bank's investment branch issued new coverage on the stock this morning, and other investors are buying up shares in conjunction with the latest research note. In a note published before the market opened today, HSBC upgraded its rating on AMD stock from hold to buy. The firm also raised its one-year price target on the stock from $100 per share to $200 per share. As of this writing, HSBC's new price target suggests additional upside of roughly 39%. HSBC pointed to an improving demand outlook for AMD's graphics processing units (GPUs) for artificial intelligence (AI) as a key factor in its ratings upgrade and big price target hike. The firm's analysts think that the company's MI350 GPUs for AI compare favorably with Nvidia's high-end Blackwell processors, and that next year's MI400 processors could further strengthen AMD's position in the data-center processing space. Thus far, AMD has trailed far behind Nvidia when it comes to the high-value data-center processor market -- but there are signs that dynamics may be starting to shift in the smaller company's favor. There's still a lot of guesswork involved when it comes to charting the business's performance outlook in advanced AI processors, but it seems to be making progress in the crucial artificial intelligence training space. Even better, AMD could see strong demand for hardware used to power AI inference applications, even if its high-end processors continue to trail behind Nvidia's for artificial intelligence training purposes.