Morgan Stanley bullish on AMD but prefers Nvidia at current levels

While Morgan Stanley raised its price target for AMD (NASDAQ:) to $193 from $128, reiterating an Overweight rating on the stock in a note Wednesday, the bank said it prefers NVIDIA (NASDAQ:) at current levels.

Analysts told investors that they remain positive on AMD’s long-term opportunity but continue to think that evolving the AI ecosystem will take time.

“We remained positive through a difficult year in AMD’s core business in 2023 because we see a 2024 recovery in all businesses in addition to strong growth in AI,” explained the analysts.

“That enthusiasm is tempered somewhat by the rally in the stock, which is up over 75% since the prior earnings report, and by informal buyside expectations for sales of the MI300 chip that seem to be equating supply chain with revenue, perhaps prematurely,” they added.

Ahead of AMD’s earnings release on Tuesday, Morgan Stanley expects AI numbers well above the $2 billion guidance for CY24, but “would not be too quick to assume huge numbers in year one – or to define the opportunity by year one – when AMD is still developing an ecosystem.” In the AI space, Morgan Stanley has a “considerably higher preference for NVDA stock from here,” concluded the analysts.