An analyst recommended buying shares in the future leader of the processor market. It will overtake Intel.
Raymond James believes AMD shares could rise 33% in price
Wall Street analysts expect AMD to triumph over Intel in 2027 / Photo: PJ McDonnell / Shutterstock
Chipmaker Advanced Micro Devices (AMD) could overtake Intel in the central processing unit (CPU) market as early as 2027, which makes its stock more attractive compared to other companies in the semiconductor sector, according to investment firm Raymond James. CNBC reports on the analysts’ views. AMD shares rose 4.5% during trading on August 25.
Details
Analysts at Raymond James upgraded their recommendation for AMD shares from “Outperform” to “Strong Buy.” They also raised the price target from $565 to $641, which implies a 33% increase compared to the closing price on August 25.
“AMD offers a powerful combination of directly converting market growth into profits, establishing a strong presence in data centers, and expanding its market share. AMD’s growth should enable it to overtake Intel by 2027,” says analyst Simon Leopold.
The potential proliferation of agent-based AI (programs capable of independently performing complex tasks and making decisions—OnInvest) should serve as “the main new driver of growth for the central processing unit market,” Leopold added.
Context
AMD designs and manufactures central processing units (CPUs)—the chips required for PCs, servers, and data centers to perform artificial intelligence tasks. Recently, the company’s business has accelerated amid growing demand for AI and computers, bringing it closer to overtaking Intel in market share in at least one segment of the CPU market, according to CNBC.
In the second quarter, AMD’s share of the x86 processor market exceeded 30%, slightly edging out Intel, which continues to hold 69.7% of the market, PCMag reported, citing data from Mercury Research. Raymond James forecasts that by 2030, the CPU market will reach approximately $201 billion. This figure includes $33.5 billion from standard data center processors, $83 billion from central processors for AI systems, and $85 billion from edge processors.
Raymond James' forecast is in line with the Wall Street consensus. According to MarketWatch, 46 of the 56 analysts covering AMD stock recommend buying it. The remaining 10 advise holding the stock in their portfolios.
This article was AI-translated and verified by a human editor
