Shares of Advances Micro Devices, Inc. AMD rallied strongly in premarket trading on Wednesday as they fell off the all-time closing high of $174.23 reached on Friday.
The premarket strength is apparently in reaction a positive analyst action.
Late Tuesday, New Street Research analyst Pierre Ferragu upgraded AMD stock from Neutral to Buy with a $215 price target. This suggests an upside potential of about 28% for the stock over the next 12 months.
In a post on X, formerly Twitter, the analyst said earlier this month, spending on AI chips will boom to $400 billion by 2027. This would mean “GPU and TPU shipments quadrupling, Other in-house accelerators ramping to represent 2x the TPU footprint,” he said.
“Nvidia, Inc. NVDA and all other silicon suppliers would massively beat expectations, even if this scenario only partially materializes,” Ferragu said. The analyst rates Nvidia a Buy with a $700 price target, a 17% upside from current levels.
AMD is scheduled to report its fourth-quarter results Tuesday after the market closes. Analysts, on average, expect the company to report non-GAAP earnings per share of 77 cents and revenue of $6.12 billion, according to Benzinga Pro data.
In premarket, the stock rose 2.11% to $171.98, according to Benzinga Pro data. It closed Tuesday’s session up 0.14% at $168.42.
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