AMD: Raising Our Fair Value Estimate To $130 From $115 as Data Center Acceleration Takes the Stage

We are raising our fair value estimate for narrow-moat Advanced Micro Devices to $130 from $115, to reflect the firm’s significant growth opportunity ahead as it capitalizes on favorable trends in data centers, artificial intelligence, and gaming. We’re optimistic about future investments in data center and artificial intelligence products, as evidenced by rival Nvidia’s exceptional near-term outlook and the excitement around ChatGPT and large language models. AMD’s shares rose about 10% on Thursday in concert with Nvidia, but we still view AMD’s shares as modestly undervalued.