Palantir Technologies (PLTR -3.10%) stock has returned 910% since the inception of the artificial intelligence boom in late 2022, and the company is currently worth $200 billion. But some Wall Street analysts expect Advanced Micro Devices (AMD -2.05%) and Uber Technologies (UBER -3.00%) to top that figure in the next 12 months.
- Aaron Rakers at Wells Fargo recently maintained his AMD forecast at $140 per share. That implies 54% upside from its current share price of $91. It also implies a market value of $227 billion.
- Mark Mahaney at Evercore recently maintained his Uber forecast at $115 per share. That implies 64% upside from its current share price of $70. It also implies a market value of $241 billion.
Here's what investors should know about Advanced Micro Devices and Uber.
NASDAQ: AMD
Key Data Points
1. Advanced Micro Devices
Advanced Micro Devices is a semiconductor company that supplies central processing units (CPUs) and graphics processing units (GPUs) for data center servers, personal computers, and video game consoles. The company also designs embedded processors for several end markets, including automotive, industrial, and medical.
The investment thesis focuses on momentum in the CPU market and potential share gains in the GPU market. Specifically, AMD in recent years has steadily gained CPU market share across personal computers and data center servers, while Intel has lost share. Intel's manufacturing missteps and AMD's partnership with Taiwan Semiconductor (which has led to more efficient chip production) have played a role.
Also, while AMD has failed to take share in data center GPUs (artificial intelligence accelerators) from Nvidia, that may change as companies seek less costly alternatives in the future. AMD will start shipping its latest Instinct MI350 GPU in mid-2025. CEO Lisa Su said on the recent earnings call that AI accelerator sales would increase from $5 billion in 2024 to "tens of billions of dollars of annual revenue over the coming years."
Wall Street estimates AMD's earnings will increase 39% in 2025. That makes the current valuation of 28 times earnings look downright cheap. If AMD merely matches that earnings estimate and maintains its current valuation, its share price would increase 39% by early 2026. That would give the company a market value of $205 billion, which is more than Palantir is worth today.
Additionally, if AMD achieves strong sales growth in AI accelerators following the release of its Instinct MI350 GPU later this year, the market may afford the company a higher valuation multiple. In that scenario, the $140 target price set by Aaron Rakers would be plausible. Regardless, now is a good time for patient investors to buy a small position.
NYSE: UBER
Key Data Points
2. Uber Technologies
Uber leads the U.S. ride-sharing market with 76% share, according to Bloomberg. It also ranks second in the restaurant food delivery market with 24% share. Additionally, the company is the market leader in ride-sharing services in nine other countries, and the market leader in food-delivery services in seven countries.
The investment thesis for Uber can be broken into two parts. First, the company should be able to maintain or even expand its market share in ride-sharing and food delivery, especially as it leans into new products (e.g., grocery, retail) and its Uber One membership program. Additionally, advertising revenue should continue to increase at steady clip as the company collects more consumer data, which informs recommendations.
Second, autonomous ride-sharing will likely revolutionize the mobility industry in the years ahead, and Uber has already partnered with several autonomous vehicle (AV) companies, including recent commercial launches with Alphabet's Waymo and WeRide.
"Uber can deliver the lowest operational costs for our AV partners because we are leaps and bounds ahead on every aspect of the go-to-market capabilities," CEO Dana Khosrowshahi said.
Uber estimates annual adjusted EBITDA growth will range from high-30% to 40% through 2026. That hints at similar growth in adjusted earnings, which makes the current valuation of 15 times earnings look cheap (that is nearly its cheapest valuation in history). If Uber grows earnings 40% in 2025 and keeps its present valuation, the stock will increase 40% by early 2026. The would give Uber a market value of $205 billion, slightly more than Palantir is worth today.
Additionally, if the company expands its partnership with Waymo, or otherwise improves its positioning in the nascent autonomous ride-sharing space, the market may afford Uber a higher valuation multiple. In that case, Mark Mahaney's target price of $115 per share would be plausible. Regardless, patient investors should feel comfortable buying a position today.
