Amid AI boom, veteran analyst reboots AMD, Supermicro stock price targets

Link copied

Amid AI boom, veteran analyst reboots AMD, Supermicro stock price targets.

trade ideas :: 11hrs ago :: source - thestreet

By Moz Farooque

Nvidia (NVDA) stock typically hogs all the AI spotlight, but if you look at the bigger picture, two other names deserve a deeper look.

AMD (AMD) and Super Micro Computer (SMCI) stock have been silently positioning themselves at the heart of AI’s next big upgrade cycle.

The former is pushing for new GPUs to hyperscalers, desperate for an alternative, while the latter is building the racks that make all that horsepower usable at scale.

With that said, a bold and fresh analyst take this week shows why these tech giants are poised to chip away at Nvidia’s massive lead.

AMD and Supermicro stocks get a fresh look from Wall Street

Image source: Cheng/Getty Images

AMD and Supermicro muscle in on Nvidia’s turf

One thing is clear from recent weeks: Nvidia’s AI crown isn’t as untouchable as it looks on paper.

AMD, in particular, has been showing that it isn’t content playing second fiddle.

CEO Lisa Su recently dropped a bombshell at the company's big “Advancing AI” event, unveiling the new Instinct MI350 series.

These powerful new GPUs are built to supercharge AI, delivering up to four times more compute performance and a 35× boost in inference.

More importantly, the top AI juggernauts in Meta, Microsoft, and OpenAI are already kicking the tires on these chips.

That shows the bellwethers in the hyperscaler space are itching for a serious Nvidia alternative.

While AMD fires up the accelerator race, Supermicro is locking down the racks to run them. Though it was primarily a key player in motherboards and chassis, Supermicro now considers itself a leading hyperscale AI systems powerhouse.

Last month, Saudi-based DataVolt signed a jaw-dropping $20 billion multi-year deal to deploy Supermicro’s liquid-cooled GPU racks across AI campuses in Saudi Arabia and the U.S.

Such an enormous order indicates that Supermicro’s modular, dense, and energy-efficient designs are critical in powering AI mega-centers.

Nvidia still calls the shots in the AI space, but AMD’s MI350X ramp and Supermicro’s hyperscale push highlight room for major competition.

More Tech Stock News:

And with the MI400 series and Helios AI Rack on deck for next year, it’s clear AMD and Supermicro are gunning to rewrite the script on AI.

Wall Street warms up to AMD and Supermicro’s AI bets

Mizuho’s latest bullish note shows how AMD and Supermicro offer strong upside for chipmakers looking to feed AI’s insatiable compute appetite.

Mizuho analyst Vijay Rakesh stuck with his Outperform call on AMD stock but raised his 12-month price target to $152 from $135.

That implies a 10.2% bump from Thursday’s close at $137.91 and a 12.6% increase from the previous price target.

Rakesh called out a “slightly better MI355X ramp” in the second half of this year.

That’s huge, considering the new Instinct series is arguably AMD’s most promising play at challenging Nvidia’s AI accelerator dominance. Hyperscalers want alternatives, and AMD’s open-standard hardware is firmly on their radars.

Still, Mizuho didn’t sugarcoat everything. It left its near-term numbers mostly unchanged, keeping the June-quarterly sales forecast at $7.40 billion and EPS at 47 cents, both just shy of consensus.

For the full year, Rakesh has trimmed its EPS slightly to $3.90.

Nevertheless, the real story is what happens next, with AMD’s robust margin mix and high-end AI chips offsetting any short-term softness.

Over at Supermicro, Rakesh sees plenty to like, too. He nudged his price target to $47 from $40, a healthy 17.5% bump, while keeping a Neutral rating.

The veteran analyst believes the demand for AI servers is running hot. Sizeable shipments for Tier-2 Microsoft Azure partners, plus a steady drumbeat of orders for Supermicro’s liquid-cooled GPU, point to an excellent runway ahead.

Also, Rakesh models the Saudi Arabia DataVolt deal, adding $2.5 billion in annual sales starting next year, highlighting a massive ramp-up in top-line expansion.