AMD upgraded to Buy as it attempts to chip into Nvidia's data center, AI market share: Truist

[AMD Markham Design Centre, Ontario, Canada.]
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Advanced Micro Devices (NASDAQ:AMD [https://seekingalpha.com/symbol/AMD]) was upgraded to Buy from Hold by Truist Securities due in part to elevated data center and artificial intelligence demand.

Truist said some AI hyperscale customers are now seriously considering the switch from Nvidia (NASDAQ:NVDA [https://seekingalpha.com/symbol/NVDA]) to AMD for processing power.

AMD shares climbed 2% during pre-market trading on Tuesday.

"For the last several years, our industry contacts (component buyers/sellers) have told us that hyperscale customers deploying AI were experimenting with AMD's technology as a 'price check' to NVDA, nothing more," said Truist analyst William Stein in an investor note. "Over the last month or so, contacts have increasingly noted that hyperscalers are working with AMD in a partnership manner, expressing true interest in deploying AMD at scale."

Truist also increased its price target on AMD to $213 from $173. The investment firm believes AMD's MI355 GPU, which launched earlier this summer, should serve as a growth driver in the quarters ahead.

Also on Tuesday, it was announced [https://seekingalpha.com/news/4489101-ibm-and-amd-join-hands-to-build-future-computing] AMD is partnering with IBM (IBM [https://seekingalpha.com/symbol/IBM]) to develop next-generation computing architectures based on the combination of quantum computers and high-performance computing, known as quantum-centric supercomputing. The collaboration aims to help enterprises efficiently scale AI workloads while leveraging IBM's secure hybrid cloud environment.

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