PhillipCapital starts coverage on AMD, highlights generative AI tailwinds
JHVEPhoto/iStock Editorial via Getty Images
Investment firm PhillipCapital started coverage on semiconductor company AMD (NASDAQ:AMD) on Monday, highlighting several potential tailwinds, including benefits of generative artificial intelligence.
Analyst Maximilian Koeswoyo started coverage on AMD (AMD) with an accumulate rating and per-share price target of $125, noting that he expects the company to gain additional market share in the data center as more workloads are going to AMD-based systems. 
"An opportunity to raise its presence in data center GPU market as customers look for second source supplier due to increased adoption of generative AI," Koeswoyo wrote in an investor note.
Koeswoyo said that although the company has a small share in data center GPUs, with Nvidia (NVDA) currently holding the dominant market share, it's likely that AMD (AMD) could gain share as customers look for a second source of supply. 
The Dr. Lisa Su-led company also has a "strong" intellectual property that can help its flexibility, as it can design semi-custom chips, including ARM-based CPUs, in addition to its x86 products.
The analyst also said he expects the company's margins to grow following its acquisitions of Xilinx and Pensando, moving to 45% to 48% by the end of 2023.
AMD (AMD) shares fell fractionally in late trading on Monday.
More on AMD

AMD's Breakthroughs At AI Tech Premiere
AMD slips even as Northland upgrades on AI boost
AMD Has A Massive Edge In Research