Nvidia, AMD To Triumph Over Q4 Market Weakness With Cutting-Edge AI, Says Analyst: What To Expect From The Chipmakers
Portfolio Pulse from Shanthi Rexaline
KeyBanc Capital Markets analyst John Vinh predicts that Nvidia (NVDA) and AMD (AMD) will outperform in Q4 despite market weakness, driven by strong AI and server demand. AMD is expected to post higher results and guidance, with positive sentiment around its AI accelerator chipset MI300x and server processor Genoa. Nvidia is also anticipated to beat Q4 expectations and issue higher guidance, despite China data center GPU sales decline, due to its position in generative AI demand. Both companies have Overweight ratings from KeyBanc, with price targets of $195 for AMD and $740 for Nvidia. The iShares Semiconductor ETF (SOXX) saw a slight decline.
January 22, 2024 | 4:26 pm
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NEUTRAL IMPACT
Investors are expected to focus on AMD's market share expectations versus Intel Corp. (INTC), as AMD reports its quarterly results.
Intel is mentioned as a point of comparison for AMD's market share expectations. The direct impact on INTC's stock is uncertain without specific performance data.
CONFIDENCE 60
IMPORTANCE 40
RELEVANCE 30
NEUTRAL IMPACT
The iShares Semiconductor ETF (SOXX), which includes semiconductor stocks like AMD and Nvidia, experienced a minor decline of 0.1% to $600.61.
While SOXX includes AMD and Nvidia, the ETF's broader exposure to the semiconductor sector means the impact of individual company news may be diluted, leading to a neutral short-term impact.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50
POSITIVE IMPACT
AMD is expected to report higher Q4 results and guidance, driven by strong server results and customer traction for its AI accelerator chipset MI300x. KeyBanc maintains an Overweight rating and a $195 price target.
The positive outlook from KeyBanc based on AMD's server results and AI chipset traction suggests a potential increase in investor confidence, which could lead to a short-term rise in AMD's stock price.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Nvidia is likely to report higher Q4 results and issue higher guidance, despite a decline in China data center GPU sales, due to strong demand for generative AI. KeyBanc has an Overweight rating and a $740 price target.
Nvidia's unique position in the generative AI market and the anticipated ability to backfill China's sales decline with global demand could lead to a positive short-term impact on NVDA's stock price.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90