AMD stock price hits a new all-time high, UBS "not afraid of high prices": significantly raises target price

Zhitong App has learned that AMD's stock price reached a new high on Thursday, while UBS Group AG raised its target price ahead of the company's fourth-quarter earnings announcement next week. AMD's stock price reached $184.92 at one point on Thursday and closed at $180.33, up 1.14%. The stock has risen nearly 140% in the past 12 months. AMD will announce its fourth-quarter earnings on January 30th.

UBS Group AG analysts stated that due to AMD's recent rebound, the strategy around profitability has become somewhat complex. However, they have more confidence in AMD's data center GPU revenue opportunities and have therefore raised their expectations for 2024 and 2025, significantly increasing the target price from $135 to $220.

The analysts stated that recent surveys of channels and customers have confirmed their view that AMD has a solid demand for over 400,000 units of the MI300A/X chip in 2024. This number is consistent with the demand analysts have seen since last summer, but they remain cautious about repeat orders and supply uncertainties.

The analysts added that after visiting several customers and suppliers, they have more confidence in the authenticity of this demand, and AMD now has sufficient CoWoS (Chip-on-Wafer-on-Substrate) production capacity, exceeding 10% of Nvidia's capacity.

Even assuming a very conservative average selling price (which could be as high as $20,000 or more for some customers), this suggests a revenue target of $5 billion for data center GPUs this year. The analysts also noted that this implies AMD's annual revenue this year could be close to $10 billion, and for most of 2025, there is still the possibility of QoQ growth in AMD's GPU shipments. UBS Group AG currently expects AMD's annualized earnings per share to exceed $6 this year, and to reach $8 per share in the second half of 2025.