AMD and Micron: Analyst Favorites for AI and Future Technology Growth

Analysts at Rosenblatt, including Steve Frankel, have named Advanced Micro Devices, Inc. (AMD) and Micron Technology, Inc. (MU) as their top picks for the first half of 2025. This selection reflects significant themes within the market, particularly the rapid rise of artificial intelligence (AI) and advancements in next-generation broadband technology.

Steve Frankel has given AMD a Buy rating and set a price target of $250. This reflects a strong belief in the company's momentum in gaining market share in both CPU and GPU segments. As 2025 approaches, it is expected that AMD will benefit from increased adoption in the AI space and a general recovery in sectors outside of AI.

What sets AMD apart entering the new year is the recognition from the market about its potential for sustained growth. Analysts predict that AMD could capture double-digit market share in areas related to GPU compute and AI inference, particularly in the edge computing segment, thanks to its established position with Xilinx and its innovative chiplet technology.

Moreover, AMD's EPYC processors are poised to enhance the company’s revenue share in server and data center CPUs, given the compelling business case they present. The upcoming MI350 and MI400 GPUs are expected to drive further revenue growth, as hyperscale adoption continues and AI increasingly transitions to edge computing.

In terms of valuation, the $250 price target reflects a price-to-earnings (P/E) multiple of 25 times Frankel's forecasted $10.00 adjusted EPS for fiscal 2026, aligning with industry standards for AI compute groups.

Frankel has also highlighted Micron Technology (MU) with a Buy rating and a similar price target of $250. Micron is identified as a key player in the expanding DRAM market, especially as more AI platforms require greater memory content. The analyst is particularly optimistic about Micron's high-bandwidth memory (HBM) segment, where the market is witnessing a favorable shift from ratios of 3-to-1 in favor of HBM compared to DDR5, which is expected to shift to 4-to-1 with the new HBM4 technologies. This represents a unique opportunity not seen in past memory cycles.

As the industry grapples with supply challenges for HBM, demand is projected to outstrip supply well into 2025. Frankel views Micron as a potential market leader in HBM with its products transitioning from 8-Hi to 12-Hi and even 16-Hi configurations, placing a premium on power efficiency, an advantage Micron possesses.

To determine Micron's valuation, Frankel considers its historical profitability, strong share buybacks, and its alignment with the increasing DRAM demands driven by AI workloads. The price target uses a mid-teens P/E multiple based on an anticipated fiscal 2026 adjusted EPS of $18.

As for recent price movements, AMD shares were observed to be up 4.70% at $124.82, while Micron's stock dipped by 0.78%.

AMD, Micron, AI, Technology, Growth