AMD Shares Surge Premarket, Setting Sights On All-Time Highs: What's Powering Rally?

Shares of Advances Micro Devices, Inc. (NASDAQ:AMD) rallied strongly in premarket trading on Wednesday as they fell off the all-time closing high of $174.23 reached on Friday.

The premarket strength is apparently in reaction a positive analyst action.

Late Tuesday, New Street Research analyst Pierre Ferragu upgraded AMD stock from Neutral to Buy with a $215 price target. This suggests an upside potential of about 28% for the stock over the next 12 months.

In a post on X, formerly Twitter, the analyst said earlier this month, spending on AI chips will boom to $400 billion by 2027. This would mean “GPU and TPU shipments quadrupling, Other in-house accelerators ramping to represent 2x the TPU footprint,” he said.

“Nvidia, Inc. (NASDAQ:NVDA) and all other silicon suppliers would massively beat expectations, even if this scenario only partially materializes,” Ferragu said. The analyst rates Nvidia a Buy with a $700 price target, a 17% upside from current levels.

AMD is scheduled to report its fourth-quarter results Tuesday after the market closes. Analysts, on average, expect the company to report non-GAAP earnings per share of 77 cents and revenue of $6.12 billion, according to Benzinga Pro data.

In premarket, the stock rose 2.11% to $171.98, according to Benzinga Pro data. It closed Tuesday’s session up 0.14% at $168.42.

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