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shares of Advanced Micro Devices (NASDAQ: AMD) The stock is up today, up 7.4% as of 1:45 p.m. ET, according to data from S&P Global Market Intelligence. meanwhile, Nvidia‘s stock price rose 2%.
Nvidia may be AMD’s biggest competitor in the artificial intelligence (AI) race, but positive news for the company tends to lift other top AI players. Today, NVIDIA stock is rising thanks to bullish analyst coverage and partnership news, and that rise is having a ripple effect on AMD.
Nvidia’s bullish news lifts AMD
No company has a bigger impact on AI stock valuations than Nvidia. Nvidia’s graphics processing units (GPUs) have become the foundational hardware powering the artificial intelligence revolution, and the positive developments for AI leaders also bode well for other companies exposed to technology trends. often interpreted. Therefore, favorable developments for Nvidia often have the effect of increasing AMD’s stock price, even though the company is a stronger rival in his GPU market.
Citing promising trends in the AI space, Tigress Financial analyst Ivan Feinseth issued a bullish note on NVIDIA stock yesterday. The analyst reiterated his buy rating and raised his one-year price target to $985 per share from $790.
Following an increase in price target, Rail Vision today announced that it will join Nvidia’s Metropolis platform for machine vision technology to leverage the GPU reader’s technology to improve the safety and efficiency of rail travel. While a competitor’s victory may not initially seem like a positive development for AMD, the overall adoption of AI technology points to a wide range of opportunities with this technology.
What’s next for AMD?
For the first quarter, the midpoint of AMD’s guidance calls for revenue of approximately $5.4 billion. If the company achieves that goal, sales would be at roughly the same level as recorded in the first quarter of last year. Meanwhile, AMD is targeting non-GAAP (adjusted) gross margin of 52%, up from 50% in the year-ago period.
AMD has yet to see significant revenue growth with the rise of AI. That doesn’t mean significant performance improvements won’t materialize at some point in the future, but investors should keep in mind that the 140% rise in stock prices over the past year has been driven primarily by future expectations. must be kept in place. Explosive sales and profit growth fueled Nvidia’s rise.
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Keith Noonan has no position in any stocks mentioned. The Motley Fool has a position in and recommends Advanced Micro Devices and his Nvidia. The Motley Fool has a disclosure policy.
“Why AMD Stock Is Soaring Today” was originally published by The Motley Fool
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