Oppenheimer recommended buying AMD stock. How is the scandal involving Nvidia's CEO affecting the stock?

Oppenheimer believes that shares of chipmaker Advanced Micro Devices are poised for a significant rebound following their recent decline. The investment firm has recommended buying AMD shares, anticipating a 34% rise in the stock price, according to CNBC. Following the espionage scandal involving Jensen Huang, the CEO of rival company Nvidia, Nvidia’s stock plummeted by more than 5% during trading on November 9, while AMD’s stock rose 13%—amid a rally in tech stocks.

Oppenheimer analyst Rick Schaefer upgraded his rating on chipmaker AMD’s stock from “neutral” to “outperform,” which is equivalent to a buy recommendation. The analyst also set a price target of $600, which implies 34% upside potential relative to the last closing price on November 6.

“We are raising our forecasts and upgrading our recommendation on AMD shares following another optimistic earnings call and our recent conversation with the company’s management,” Schaefer wrote in a note cited by CNBC. “We see AMD becoming a sustainable provider of computing power for artificial intelligence.” He noted that AMD’s contracts with customers spanning several product generations and solutions based on Helios server systems “lay the foundation for significant expansion of the company’s business in the data center segment.”

According to the analyst, the annual release of new generations of Instinct AI accelerators and the development of AMD’s open software stack are strengthening the company’s competitive position. At the same time, the proliferation of agent-based AI, which requires significant computing resources, is creating additional demand for graphics processing units (GPUs) and central processing units (CPUs).

Over the past month, AMD’s stock has fallen 15%. Investors have been reducing their holdings in semiconductor manufacturers and other companies related to artificial intelligence amid concerns about financing risks in the industry. However, according to Oppenheimer, AMD’s stock could resume its upward trend as its strategic partnership with Anthropic expands in the first quarter of 2027. And in the second half of the year, AMD plans to introduce the MI500 line of graphics processors, designed for high-performance computing and large-scale AI model training: their launch should bolster the company’s business and its stock price, according to Schaefer.

According to Oppenheimer’s forecast model, AMD’s revenue in the data center segment will grow by 135% in 2027. The analyst also expects the company to increase its market share in the server processor market and see growth in sales of its server components. The client and gaming segments will make an additional contribution to results, although their role will be smaller. This will improve AMD’s profit structure, the analyst wrote.

The spy scandal that sent the stock price of Nvidia, the industry leader in AI chip manufacturing, plummeting may also have provided support for AMD’s stock during trading on November 9. Nvidia CEO Jensen Huang admitted to having a relationshipwith a woman whom U.S. authorities suspect of collaborating with Chinese intelligence.

"The initial reaction might be to assume that Nvidia's competitors, such as Broadcom and AMD, will benefit in the long run from any problems the company faces by increasing their market share. However, it is virtually impossible to predict how the situation will unfold at this point,” according to a note from Melius Research cited by CNBC. “Although such headlines grab attention, they are unlikely to influence purchasing decisions in the near term amid an acute shortage of computing power. “The development of artificial intelligence will continue, and Nvidia is in the best position in terms of allocating available capacity to meet this demand.”

Most Wall Street analysts who cover AMD stock recommend buying it: the company has 51 “buy” ratings out of 60, according to MarketWatch. The remaining nine analysts recommend holding these stocks in their portfolios. The average Wall Street price target is $655.9, which is 40.5% higher than the closing price on November 6.

This article was AI-translated and verified by a human editor