The share price of computer processor maker Advanced Micro Devices (NASDAQ: AMD) has resumed bullish momentum, aligning with the overall stock market rally following the Federal Reserve’s interest rate cut.
At the close of the latest trading session, AMD was valued at $156, gaining almost 6% for the day. Indeed, the stock is recovering after recording significant sell-offs at the start of September, triggered by the overall market decline.
With AMD still capitalizing on the artificial intelligence (AI) boom and announcing a series of new chips for the coming months, its share price remains a subject of speculation. To this end, Finbold consulted OpenAI’s brand-new ChatGPT model – o1 – to determine where AMD stock will stand at the end of 2024.
OpenAI o1 predicts AMD stock price
The new OpenAI model shared three price scenarios for AMD, focusing on bullish, bearish, and neutral outlooks. In an optimistic situation, with increased demand for semiconductors in the AI space and the company launching new products, OpenAI’s o1 projected that AMD could trade at $220.
However, in a bearish scenario, where AMD fails to keep up with competition from giants such as Nvidia (NASDAQ: NVDA), coupled with economic headwinds, the AI platform suggested that the stock could plunge to around the $130 level.
Meanwhile, if AMD operates in an environment without significant catalysts or downturns, the stock could trade at a moderate price of around $165.
Analysts take on AMD stock
Aside from the AI platform’s price estimates, several analysts have shared a bullish outlook for AMD stock, with a majority citing the company’s ability to mount formidable competition to Nvidia in the chips scene.
For instance, on September 10, UBS analysts noted that the company’s GPU offerings are seen as “competitive” with Nvidia, citing superior memory bandwidth and a push towards full-system solutions.
It’s worth noting that AMD aims to bolster its AI business after the technology giant acquired AI infrastructure provider ZT Systems in an August 19 announcement. The deal, valued at $4.9 billion, is expected to enhance AMD’s non-GAAP earnings by the end of 2025.
The expansion prompted Citi (NYSE: C) to project that it could be instrumental in acting as a catalyst for AMD. Back in August, Citi pointed out that the acquisition would help AMD compete with Nvidia “in the data center GPU market via additional system experience and faster hyperscaler deployment times.” As a result, analysts from the bank placed a high price target of $210 for AMD.
Indeed, during the second quarter, AMD surpassed analysts’ projections after reporting record sales of processors for data centers. The Santa Clara-based firm registered a revenue of $5.84 billion, beating estimates of $5.72 billion. A breakdown of the returns showed that data center revenue skyrocketed 115% year-over-year to $2.83 billion.
At the same time, analysts from Baron Technology Fund noted that AMD investors will have to battle short-term challenges, such as stock volatility and competitive pressures, particularly from Nvidia. In the long term, the experts see opportunities stemming from the company’s innovative chipset-based architecture and open-source software, which position it well to capitalize on the rapidly growing AI computing market.
AMD stock technical outlook
In the meantime, technical indicators suggest that AMD might be primed for a possible breakout. According to analysts shared by stock trading expert Jake Wujastyk in an X post on September 20, shares of AMD are depicting signs of bullish momentum.
According to Wujastyk, AMD has been forming a descending channel pattern similar to a previous setup where it eventually broke out to the upside. The current structure suggests continuing this pattern, with the stock trading at $156. If history repeats, AMD could be set for another upward move, provided it manages to break the current channel’s resistance.
In conclusion, AMD’s share price performance appears poised for further growth, driven by its positioning in the AI market, strategic acquisitions, and robust financial results. While short-term challenges such as competition from Nvidia and market volatility persist, the company’s innovative technologies and product launches offer a solid foundation for future success.
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Source: https://finbold.com/openai-o1-predicts-amd-stock-price-for-the-end-of-2024/