AMD (AMD) might face a potential stock correction around earnings results on Tuesday because of a tougher near-term setup, but long-term artificial intelligence tailwinds remain strong, BofA Securities said Monday in a note.
The investment firm said despite a “multi-hundred” billion dollar AI market, AMD faces tough competition from Nvidia, which has over 75% market share, and customer chip partners.
AMD is expected to gain share in server CPU market from Intel in Q4, and the trend will continue in 2024, BofA said. The firm expects AMD’s combined revenue from PC and server CPU to make up 20% of the total in 2024.
BofA reiterated its buy rating for AMD and raised price objective to $195 from $165.