Investing.com — Advanced Micro Devices shares are up over 2% premarket on Tuesday after Truist analysts upgraded the stock to Buy from Hold and lifted their price target to $213 from $173 per share.
The firm cited improving sentiment from industry contacts around the company’s data center and AI positioning.
Truist said its “industry contact feedback turns constructive on AMD’s DC/AI traction,” with hyperscale customers increasingly engaging with AMD in a “partnership manner, expressing true interest in deploying AMD at scale.”
Analysts noted this is a shift from prior years, when customers viewed AMD largely as a “price check” against Nvidia.
The firm highlighted that its long-standing view had been that Nvidia’s lead in data center GPUs, underpinned by its CUDA software ecosystem, left little room for a sustainable second supplier.
However, Truist now sees a change in tone. “Recently, they have told us that hyperscale customers are working with AMD as a potential partner rather than simply as a ‘price check’ to NVDA. This change in messaging from the field is the basis of our upgrade,” the analysts wrote.
Truist drew a parallel to AMD’s earlier rise in server CPUs, noting that until 2018, the company held less than 1% share before its “Rome” product helped it gain traction as Intel stumbled. AMD’s share now stands near 21%.
For GPUs, Truist does not expect Nvidia to repeat Intel’s missteps but is now modeling AMD reaching a structural 10% market share over time.
The analysts raised their EPS estimates, setting CY27 at $7.89, and see AMD’s MI355 chip, launched in late June, as a key driver of growth in the coming quarters.
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