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Advanced Micro Devices, Inc. (AMD) is a Santa Clara-based semiconductor company specializing in central processing units (CPU), graphics processing units (GPU), Field Programmable Gate Arrays (FPGAs), and adaptive SoCs. With a solid market cap of $265.8 billion, the chip giant delivers high-performance computing solutions for cloud, edge, and end devices.
Advanced Micro Devices stock has significantly outperformed the broader market over the past 52 weeks. AMD has gained 58.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. In 2024, AMD stock has risen by 11.6%, whereas the SPX is up by 11.2% on a YTD basis.
Zooming in further, AMD also outpaced the S&P Semiconductor SPDR's (XSD) 27.1% gains over the past 52 weeks.
AMD’s robust price action relative to the broader indexes over the past year can be attributed to the surging GPU demand driven by the booming artificial intelligence (AI) industry.
However, AMD stock took a hit on May 1, dropping almost 9% after its Q1 earnings report. Though sales and earnings slightly beat expectations, concerns remain about the extent of its AI-related growth. Yet, AMD stock surged recently following reports that Microsoft will offer its cloud customers AMD's MI300X AI chips on Azure as an alternative to Nvidia Corporation's (NVDA) chips.
For the current fiscal year, ending in December, analysts expect AMD to report EPS growth of 31.7% to $2.62. The company’s earnings surprise history is promising. It beat or matched the consensus EPS estimates in all four quarters.
The consensus view on AMD has been bullish overall. Among the 34 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 28 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly more bullish than three months before, with 27 analysts suggesting a "Strong Buy" rating.
On May 13, Jefferies analyst Blayne Curtis lowered the price target for AMD from $200 to $190 but maintained a "Strong Buy" rating. Curtis is bullish on U.S. semiconductors, noting the sector's early cycle and expected strength due to AI advancements.
The mean price target of $190.75 represents a 16% upside potential from AMD's current levels. The high-price target of $265, assigned by Melius Research in March, implies that the stock can rally as much as 61.1%.
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.
