AMD posted one of the strongest gains on the S&P 500 on the New York Stock Exchange on Tuesday after HSBC upgraded its recommendation on the stock to buy.

About an hour after opening, the processor manufacturer's shares gained 1.6%, while the S&P fell by 0.1%.

HSBC has raised its recommendation on the stock, with a price target raised from $180 to $225.

In a research note, the British bank believes that the American group enjoys sufficient demand and has the right capabilities to exceed its sales target of over $3.5 billion in graphics processing units (GPUs) for AI in 2024.

It also believes that AMD's next-generation AI chips, to be launched in the second half of this year, could compete directly with Nvidia's.

As Nvidia cannot possibly control 100% of the AI GPU market, HSBC expects AMD to capture 10% of the segment by 2025, representing potential sales of $12.3 billion next year.

These comments come as AMD announced on Tuesday the launch of new AI-powered Ryzen processors for mobile devices and laptops.

Copyright (c) 2024 All rights reserved.