Piper Sandler names AMD as top large-cap pick into 2H24

Piper Sandler analysts named AMD (NASDAQ: NASDAQ:AMD) their top large-cap pick for the second half of 2024, citing positive feedback from their discussions with the chipmaker's management in Europe last week.

The investment bank said it was impressed with AMD’s strategy and competitive positioning, particularly for the MI300 accelerator series, which it expects to surpass $4 billion this year.

The AI chip manufacturer also plans to launch new chips, including the MI325 later this year and the MI350 in 2025, both featuring next-gen HBM3E memory. The MI350 will also include CDNA4 and a 3nm process node, competing with Blackwell architecture, while the MI400, set for 2026, will compete with Rubin.

Piper Sandler highlights that AMD currently has more than 100 customers, including Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Oracle (NYSE:ORCL), and successfully ran ChatGPT's latest model with a trillion parameters.

Beyond AI chips, the firm also anticipates positive developments for both AMD’s server and PC businesses.

“These tailwinds coupled with embedded hitting bottom in the June quarter; we view AMD as having bright prospects moving into the back half of the year,” {{0|Piper Sandler}} analysts noted.

“As such, we are making AMD a top pick in the large-cap space as the company currently has 100+ customers in the AI accelerator space, with most of them ramping in 2H,” they added.

Lastly, {{0|Piper Sandler}} noted that GPU supply for AMD is also expected to improve to meet the high demand and pointed out that the company’s valuation looks attractive compared to its peers in the computing space.