Shares of Advanced Micro Devices (NASDAQ: AMD) are rising today, up 7.4% as of 1:45 p.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, Nvidia‘s stock was up 2%.
Nvidia may be AMD’s biggest competitor in the artificial intelligence (AI) race, but positive news for the company has a tendency to lift other top AI players. Nvidia’s share price is moving higher today thanks to bullish coverage from an analyst and partnership news, and the gains are having spillover effects for AMD.
Nvidia’s bullish news lifts AMD
No company has a greater impact on AI stocks’ valuations than Nvidia. Nvidia’s graphics processing units (GPUs) have become the foundational hardware powering the artificial intelligence revolution, and favorable developments for the AI leader are often interpreted as a positive sign for other companies with exposure to the tech trend. So even though the company is a more powerful rival in the GPU market, favorable developments for Nvidia often have the effect of sending AMD stock higher.
Citing promising trends in the AI space, Tigress Financial analyst Ivan Feinseth published a bullish note on Nvidia stock yesterday. The analyst reiterated his buy rating and raised his one-year price target from $790 to $985 per share.
On the heels of the price-target hike, Rail Vision announced today that it’s joining Nvidia’s Metropolis platform for machine vision technologies and will be using the GPU leader’s tech to improve the safety and efficiency of rail travel. While a competitor’s wins might not initially seem like a favorable development for AMD, overall adoption of AI technologies points to broad-based opportunities with the tech.
What comes next for AMD?
For the first quarter, the midpoint of AMD’s guidance calls for revenue of roughly $5.4 billion. If the company were to hit that target, it would mean that sales would come in at approximately the same level that it posted in Q1 last year. Meanwhile, AMD is guiding for non-GAAP (adjusted) gross margin of 52%, up from 50% in the prior-year period.
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