William Blair has upgraded Advanced Micro Devices (AMD) to an 'outperform' rating, citing potential benefits from the ongoing scandal surrounding Nvidia, its competitor.
Nvidia's CEO, Jensen Huang, resigned following allegations of personal misconduct and a relationship with a woman suspected of espionage, leading to increased scrutiny and a significant drop in Nvidia's stock price, which has fallen 16% since November 3 and an additional 13% in early trading on the day of the announcement. In contrast, AMD's shares have surged 37% during the same period.
Analyst Sebastien Naji noted that while Nvidia faces challenges, AMD is positioned to gain market share, particularly as Intel struggles with delays in its Xeon roadmap. Naji highlighted AMD's opportunity to expand its presence in the $220 billion server CPU market by addressing it a year ahead of Intel, with AMD's revenue share expected to increase beyond the current low- to mid-40% range.
This positive outlook for AMD aligns with broader Wall Street sentiment, where 48 out of 56 analysts recommend buying or strongly buying AMD stock