(CTN News) – As demand for AMD’s artificial intelligence chips rises, AMD shares rose more than 8% Tuesday, reaching their highest closing price since November 2021.
Earlier this week, Tom O’Malley, an analyst with Barclays, increased his price target from $120 to $200, predicting the company could post $4 billion in AI chip sales this year. According to O’Malley, AMD’s MI300 is most advanced machine learning chip for servers, and the company has a buy rating for the stock.
As a result of the strong demand for AI servers, KeyBanc analysts have also increased their price targets for AMD and Nvidia on Tuesday to $195 and $740, respectively.
The AMD stock closed at $158.74 on Tuesday, roughly 2% below its all-time high. The stock of Nvidia, which holds the majority of the market for artificial intelligence chips and was the best-performing stock in the S&P 500 last year, gained 3% to $563.82.
It was announced in late 2023 that new server chips would compete with Nvidia’s H100 and A100 GPUs, which are used by OpenAI for training and serving its models, such as ChatGPT.
AMD and Nvidia are two of the largest manufacturers of graphics processing units, which were originally created for advanced computer games, but are now vital for training and running artificial intelligence models. During the past two years, Nvidia has been the primary beneficiary of investor interest in AI applications because the company developed AI software for its chips over a decade ago.
The companies I invest in simply cannot get enough of the software layer they have built around their chip, venture capitalist Jim Breyer told on Tuesday.
During a recent interview with, Breyer stated that he was “pounding the table” for both Nvidia and AMD shares.
According to analysts, AMD is improving its AI software and major chip buyers, such as cloud providers, are likely to give GPUs a serious consideration.
In the view of O’Malley, “we are in no way discounting the lead that NVDA currently holds, but we believe that the desire to have a second source will outweigh any difficulties that might arise for the software ecosystem.”