Palantir Technologies’ (NASDAQ: PLTR) stock has surged by 255% in the past year, elevating its market capitalization to approximately $200 billion. Nonetheless, numerous Wall Street analysts anticipate that Advanced Micro Devices (NASDAQ: AMD) and Uber Technologies (NYSE: UBER) could surpass this market value within the next year. Key analysts include:
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Jim Kelleher from Argus Research projects a 12-month price target for AMD at $160 per share. This would represent a 52% increase from its current price of about $105, resulting in a market cap of $260 billion for the company.
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Mark Mahaney at Evercore has set a 12-month target of $115 per share for Uber, suggesting a 55% upside from its current price of $74, leading to a $240 billion market value.
Investors should take note of the developments regarding AMD and Uber.
AMD specializes in chip design across four main sectors: data centers, client computing (including laptops and desktops), gaming consoles, and embedded processors. In recent years, AMD has consistently captured market share in central processing units (CPUs) within both the client and data center markets, while its competitor, Intel, has seen a decline. However, AMD has struggled to gain ground against Nvidia in the graphics processing unit (GPU) market and related AI accelerator chips.
AMD’s fourth-quarter results were strong overall, but sales in the data center sector fell short of expectations, disappointing the market. Revenue rose 24% to $7.6 billion, with non-GAAP net income reflecting a 42% increase to $1.09 per diluted share. During a recent earnings call, CEO Lisa Su projected that AMD’s data center AI revenue could soar from $5 billion in 2024 to “tens of billions of dollars in annual revenue in the coming years.”
Kelleher emphasized that AMD’s gains in client and data center CPUs, market leadership in console gaming, and a strengthened embedded sector collectively position it for substantial long-term growth beyond that of its peers. He also expressed that the current share price does not fully represent AMD’s long-term growth potential, as it continues to erode Intel’s CPU market share and may also capture GPU market share from Nvidia.
Although many investors feel let down by AMD’s inability to match Nvidia’s growth, I believe that the market has become excessively pessimistic about AMD’s future. Wall Street predicts that AMD’s earnings will increase by 40% in 2025, making its current valuation of 32 times earnings seem relatively inexpensive. If AMD’s data center GPU revenue accelerates as CEO Lisa Su forecasts for late 2025, it may drive stock performance upward, potentially aligning with Kelleher’s anticipated 52% gain. This could be a strategic moment for patient investors to consider acquiring a small stake in the stock.
