Advanced Micro Devices (NASDAQ:AMD), commonly known as just AMD, is among the world’s biggest and best-known artificial intelligence chip makers of the 2020s. Yet, somehow, AMD isn’t designated as an elite “Magnificent Seven” or “Mag-7” member. This doesn’t change our AMD stock outlook at all, though, and we’re still assigning the stock a confident “A” grade.
In an eye-opening move, AMD raised its full-year 2024 MI300 AI processor revenue guidance from $2 billion previously to $3.5 billion currently. Clearly, AMD’s management is supremely confident in its ability to monetize its AI-compatible hardware. So, if you want the best and brightest AI-tech standouts in your portfolio this year, AMD definitely ought to be on your watch list.
This Could Catalyze the Next Leg Up in AMD Stock
What could possibly revive the personal computer industry? And, what will differentiate the next wave of smartphone models from their predecessors? The answer, as you may have guessed, has to do with AI features and functionalities.
There are huge implications for AMD, which is constantly on the leading edge in providing AI-compatible chips. If the next wave of PCs and mobile handsets will require powerful AI processors, you can count on AMD to step up to the plate.
Research from two different firms points to powerful growth for these markets. Research firm Gartner predicts that smartphone manufacturers will ship around 240 million generative AI smartphones in 2024. Furthermore, the firm anticipates that vendors will ship 54.5 million AI PCs this year.
In addition, research firm IDC estimates that AI-powered PCs (per Barron’s) “will account for nearly 60%” of all PCs “shipped by 2027, growing from an estimated 50 million this year to 167 million in 2027.” IDC specifically identified AMD as one of the companies that has “announced future chips” for the category of “next generation” AI PCs.
AMD Quietly Unleashes a Potential Game-Changer
Along with the expected surge in AI-enabled smartphones and PCs, here’s another positive catalyst for AMD stock. You might not have heard much about this news story, but AMD just launched a product line called AMD Embedded+.
This is a news story that’s relatively quiet now, but could prove to be a game-changer throughout 2024. AMD Embedded+ is the company’s new processor-architecture solution for AI applications. To put it simply, AMD Embedded+ is an architecture line that’s optimized for a broad variety of AI application.
The press release specifies “medical, industrial, and automotive applications,” though it’s easy to envision other sectors effectively deploying AMD Embedded+. Chetan Khona, senior director of Industrial, Vision, Healthcare and Sciences Markets, AMD, explained the need for this type of product:
“In industrial and medical applications, many decisions need to happen in milliseconds. Embedded+ maximizes the value of partner and customer data, with energy efficiency and performant computing that enables them to focus in turn on addressing their customer and market needs.”
Because of the tech jargon involved, some investors will undoubtedly bypass this news item. That’s a shame, as AMD Embedded+ looks like another “gold standard” product for AMD as well as a potential long-term revenue generator.
AMD Stock Outlook: Prepare for ‘Magnificent’ Results
Some folks might spend their time debating whether Tesla (NASDAQ:TSLA) ought to be removed from the “Magnificent Seven.” A better topic for discussion would be AMD’s magnificent qualities as an AI-hardware leader and innovator.
Don’t waste your time obsessing about which company is part of some exclusive club. Our AMD stock outlook is bullish because the company’s AI-compatible products are top-notch. The stock easily earns an “A” grade and is appropriate for many investors’ portfolio strategies.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
