Advanced Micro Devices (AMD) has enjoyed a stellar six-month recovery, yet many on Wall Street still discount the stock, wrongly viewing it as “dead money” in the shadow of Nvidia’s (NVDA) dominance in the GPU market.
That skepticism was challenged in a recent note by analyst Christian Darnton, who described Nvidia’s AI and HPC leadership as an “illusion,” arguing that AMD could be on the verge of a record-breaking run that could send the stock to a $1 trillion market cap.
While AMD controls only about 8% of the GPU market compared to Nvidia’s roughly 80%, its growth potential lies in its chiplet architecture — a design that splits processors into smaller modules, or “chiplets,” which are then linked together.
This approach improves yields, lowers costs, and offers flexibility in combining different types of compute units, making it better suited for the unpredictable demands of future AI and HPC workloads. Darnton called chiplets “a structural edge for an uncertain workload future.”
He also credited CEO Lisa Su with transforming AMD from a struggling PC-chip supplier into a diversified powerhouse in CPUs, GPUs, and custom silicon.
Under her leadership, AMD not only returned to profitability but also regained market share in server and desktop processors, setting the stage for its AI push.
Another advantage, Darnton noted, is AMD’s embrace of open software ecosystems, which aim to challenge Nvidia’s proprietary CUDA framework.
CUDA has long been seen as a major competitive moat, locking developers and enterprises into Nvidia’s ecosystem. AMD’s open strategy, if it gains traction, could weaken that lock-in and level the playing field in AI computing.
Chart watchers see AMD primed for another breakout rally
Alongside its business potential, technical traders see major breakout opportunities for AMD stock, which has already rallied 48% over the past six months but is virtually flat on a year-over-year basis.
Trader Zachary Markovich noted that AMD is trading within a falling channel pattern, often seen as a bullish flag. “Eventually this trades higher,” he said.
Analyst Korinek Trades projected an intermediate price target of around $190, based on Elliott Wave analysis — implying about 21% upside from current levels.
Quant trader Peter DiCarlo’s model identified a year-end target of $200 for AMD, with the potential to reach $380 by 2026, pointing to further long-term upside.
Earlier in September, trader and popular X user Dr. Stoxx flagged a technical setup for AMD that previously triggered a 140% rally. “It’s not often you get to buy shares [...] with the Stochastics at zero in a bullish wedge off a rounded bottom,” he said, referring to the stock being at oversold levels and primed for a breakout.
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