Why is Citi 'wildly bullish' on AMD stock despite 110% rally in price
The AMD (NASDAQ:AMD) stock price has had a tremendous rise over the last few months, rising 110% since October and more than 39% in the year-to-date. Like most semiconductor chip companies, the rally has been fueled by artificial intelligence (AI).
For many analysts and investors, such a rise may result in some cautiousness. However, Citi is still “wildly bullish on the stock.”
As mentioned, the rise of artificial intelligence has fuelled the rally for AMD, with growth primarily stemming from the data center market, where the company has gained share in recent years.
Goldman Sachs analysts said in a recent note that, looking ahead, they “expect large cloud hyperscale customers to prioritize capital spending on accelerated compute (vs. general-purpose compute) in 2024, and for market share within general-purpose compute (or traditional servers) to shift in favor of AMD.”
Of course, the rise across the sector has been led by Nvidia (NASDAQ:NVDA). However, AI chip demand across the board has boosted share prices.
In its recent first quarter 2024 earnings release, AMD reported mixed results and lowered 1Q24 guidance, but it raised its expectation for MI300 sales in 2024 from over $2 billion to over $3.5 billion.
However, analysts at Citi estimate over $5 billion in 2024 MI300 sales and $8 billion in 2025 in MI300 sales.
The January 30 earnings release saw AMD shares decline just over 2.5% to $167.69 per share. However, since then, it has pushed to well over $197 per share. AMD stock hit a high of $201.59 today.
Despite the already monumental rise for stock prices in the sector, Citi analysts said in a recent note that they are “wildly bullish” on semiconductor stocks, given stable demand in PC’s/Handsets/Servers (53% of
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