UBS has issued a buy rating for both AMD and Arm Holdings, raising its 12-month price target for AMD from $470 to $670, indicating a potential upside of 29% from its recent closing price. Similarly, Arm's target was increased from $260 to $455, suggesting a 28% upside.
Analyst Timothy Arcuri noted that both companies are expected to benefit significantly from the growing demand for CPUs, particularly in the context of agentic AI, which requires advanced processing capabilities. AMD's stock has surged 153% over the past three months, while Arm's shares have increased by 171%.
The report highlights that AMD's advantages in core count and multithreading, along with its established software ecosystem, position it well for the increasing adoption of CPUs in AI workloads. Arm, which went public in September 2023, is also well-positioned due to its focus on latency and efficiency, aligning with the needs of hyperscalers.
The overall sentiment on Wall Street is positive, with a majority of analysts recommending both stocks as strong buys