AMD shares rise 10% after analysts say they expect a 'snapback' for chipmaker

Shares of Advanced Micro Devices (AMD) experienced a significant increase of nearly 10% on Monday. This surge followed a price target upgrade from analysts at Piper Sandler, who expressed optimism regarding the chipmaker's recent product launches. The analysts anticipate a rebound in AMD's graphics processing units (GPUs) in the upcoming fourth quarter. This optimism comes as the company approaches the end of a challenging period, during which it is expected to absorb approximately $800 million in costs tied to new U.S. licensing requirements for semiconductor exports to China and other nations. Recently, AMD showcased its next-generation artificial intelligence chips, the Instinct MI400 series. A standout feature from the announcement was the introduction of a full-server rack named Helios, designed to connect thousands of these chips. This innovation is anticipated to be crucial for AI-focused clients, including cloud service providers and developers of extensive language models. During a presentation in San Jose, California, AMD's CEO Lisa Su highlighted these advancements alongside OpenAI CEO Sam Altman, who remarked that the technology sounded "totally crazy." The analysts from Piper Sandler expressed their strong enthusiasm for the product launches, particularly praising the Helios rack as a key driver for AMD's growth in the Instinct line. In light of this positive outlook, Piper Sandler raised its price target for AMD shares from $125 to $140. Following this news, AMD's stock climbed above $127, marking its highest point since January 6, before the implementation of significant tariffs by then-President Donald Trump and AMD's warning about chip control costs.