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Advanced Micro Devices, Inc. (AMD), with a massive market cap of $214.3 billion, is a leading semiconductor company specializing in high-performance and adaptive processor technologies. The California-based company serves diverse sectors, from cloud computing to embedded systems.
Shares of the chipmaker have underperformed the broader market over the past 52 weeks. AMD has gained 12.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19%. In 2024, shares of AMD are down almost 10%, significantly lagging behind SPX's 14.2% gain on a YTD basis.
However, zooming in further, AMD is outpacing the S&P Semiconductor SPDR's (XSD) marginal gain over the past 52 weeks.
AMD has underperformed relative to the SPX due to shifting investor sentiment away from AI chip providers and a challenging macroeconomic environment. A weaker-than-expected sales outlook and heightened competition have further impacted its stock performance. However, the stock jumped 4.4% on Jul. 31 following a 115% increase in data center revenue in Q2, driven by over $1 billion in sales of the new Instinct Mi300 GPUs.
For the current fiscal year, ending in December, analysts expect AMD's EPS to grow 30.7% year over year to $2.60. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 35 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 28 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration has remained fairly steady over the past month.
On Jul. 31, Morgan Stanley's (MS) analyst Joseph Moore raised AMD's price target to $178 while maintaining an “Equal-Weight” rating, citing unexpectedly strong Q3 guidance and optimistic AI prospects, with the firm's 2024 target revised upward. This new target suggests a 34.3% potential upside from current price levels.
The mean price target of $197.78 represents a premium of 49.2% to AMD's current levels. The Street-high price target of $265 implies an impressive potential upside of 99.9% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
