BofA: Ignore Nvidia Endorsement, Focus on AMD's AI Potential
Advanced Micro Devices Inc. (AMD) shares fell 7% on Wednesday after the company delivered another quarter of explosive data-center growth.
The decline was not solely due to earnings, as rival Nvidia Corp. (NVDA) received a significant endorsement from Elon Musk.
Musk stated that SpaceX has committed to using Nvidia GPUs exclusively because 'they are the best,' which may have been perceived as a negative for AMD investors.
However, Bank of America analyst Vivek Arya advised clients to 'ignore the quarterly noise' and instead focus on AMD's future prospects in AI computing.
Arya noted that AMD's real AI test begins in 2027 with the ramp-up of its Helios rack-scale platform, which is expected to accelerate through the year.
The analyst maintained a Buy rating and $620 price objective for AMD, implying nearly 28% upside from current levels.
BofA also increased its calendar 2026 earnings estimate by just 2%, while lifting its 2027 forecast by 20%. The 2028 estimate was raised by 34%.