AMD Stock: Rosenblatt Analyst Sees Dip as a Buying Opportunity Amid AI Market Growth

Desk4 hours ago

Despite a recent dip in AMD (Advanced Micro Devices) stock following its Q4 2024 earnings release, Wall Street analysts continue to show strong confidence in the company’s future prospects. Rosenblatt Securities analyst Hans Mosesmann reaffirmed his Buy rating on AMD stock, viewing the recent drop as an opportunity for long-term investors. While Mosesmann lowered his price target from $250 to $225, he still sees the stock holding a potential for more than 100% growth, underscoring his optimism for the company’s position in the booming AI and data center markets.

Why Did AMD Stock Fall?

AMD reported a mixed quarter, which led to a temporary dip in stock price. Though the company posted overall strong growth, there were specific concerns that weighed on investor sentiment:

Data Center Revenue Miss: AMD’s Q4 data center sales came in at $3.86 billion, falling short of the expected $4.14 billion. While this still represents a 69% year-over-year growth, it was below the analyst estimates, leading to a negative market reaction.
Weak Q1 2025 Outlook: CEO Lisa Su issued a conservative forecast for Q1 2025, predicting a 7% decline in data center sales. This raised investor concerns about short-term growth in the data center segment, one of AMD’s primary revenue drivers.
AI Revenue Uncertainty: Investors remain cautious about AMD’s ability to capitalize on the fast-growing AI market in the near term, particularly as Nvidia (NVDA) maintains a stronghold on AI-focused GPUs.

Mosesmann’s Bullish Long-Term Outlook

Despite short-term concerns, Hans Mosesmann remains a firm believer in AMD’s ability to thrive over the long run. He dismissed fears that ASICs (Application-Specific Integrated Circuits) could disrupt AMD’s GPU dominance, particularly in AI workloads. Mosesmann pointed out that custom ASICs have not yet replaced GPUs, with GPUs still being the preferred solution for AI and data center workloads in 2024.

He also praised CEO Lisa Su’s leadership, noting her success in positioning AMD to benefit from the growing AI and data center markets. Mosesmann believes that the company will capture double-digit market share in data center GPUs and AI compute units. The AI market itself is expected to be a $500 billion opportunity, providing a massive growth runway for AMD in the coming years.

Is AMD Stock a Buy?

While AMD’s short-term prospects may seem uncertain, the long-term outlook remains promising. Mosesmann sees the current dip in AMD’s stock as a strong buying opportunity for investors looking to capitalize on the company’s potential in the AI and data center space.

Analyst Ratings: Wall Street analysts maintain a Moderate Buy consensus on AMD, with 21 Buy ratings, 11 Hold ratings, and 1 Sell rating.
Price Target: The average price target for AMD stock is $150.35, implying a 34.23% upside from current levels, signaling confidence in the company’s future growth potential despite near-term volatility.

Key Takeaways

Data Center Revenue Miss: AMD reported $3.86 billion in Q4 data center sales, below expectations.
AI Market Opportunity: AMD is poised to capture a double-digit share in the AI market, which has a $500 billion total addressable market.
Stock Outlook: The average price target of $150.35 suggests 34.23% upside from current levels.
Analyst Confidence: Rosenblatt’s Hans Mosesmann sees the stock dip as a buying opportunity for long-term investors.

With AMD’s strong leadership under Lisa Su, its position in the growing AI market, and its expanding role in the data center industry, AMD remains a company to watch as it navigates near-term challenges and sets its sights on long-term growth in the rapidly expanding AI space.