Chip stocks: Wolfe Research bullish on AMD, Nvidia

Chip stocks are in the spotlight at Wolfe Research, with the firm reiterating its Outperform rating on Nvidia (NVDA) and Advanced Micro Devices (AMD). The research firm has raised its price target on Nvidia to $1,200, which is up from $900. Additionally, Wolfe Research has added AMD to its Wolfe Alpha List, citing the chipmaker's robust AI product lineup.

Yahoo Finance's Josh Lipton and Julie Hyman break down the details.

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This post was written by Angel Smith

Video transcript

Let's look now at some calls of the Day Wolf research reiterating out perform on a NVIDIA and A MD and raising its price target on NVIDIA to $1200.

That's up from $900.

This was an interesting note.

Um Julie, so Ba I mean, listen, the team of Wolf, they still like NVIDIA for sure, but it sounds like the analysts making a tactical shift in priority adding Lisa Sue's A MD to the Wolf alpha list, which from what I was reading is a group of stocks which they think listen, this is a group with the, they could show big meaning flat performance over kind of a 12 month time frame.

And in part, it looks like no surprise.

This is, this is A I related, you know, like what he hears from about AM DS A I product pipeline.

Well, and a lot of this also has to do with the relative performance of these two stocks.

A MD is up about 11% this year, NVIDIA is up 92% this year.

So the analyst is looking at these two names and saying, well, NVIDIA is great but that it's already risen a lot.

The company is out with its earnings next Wednesday after the close of trading.

And the analysts say we are not expecting an exceptional beat win NVIDIA report, but we do anticipate a much stronger second half.

So this, I think the A list also has to do with sort of, as you said, more tactical.

And so if there's more room for upside because one stock hasn't gone up as much.

It kind of makes sense and a bad valuation he do about a MD.

He says, uh we believe the premium multiple is warranted, given that A MD has, he says, clearly earned a seat at the A I table.

Julie indeed a seat at the A I table.