Shares of Advanced Micro Devices (NASDAQ: AMD) soared by as much as 8.2% on Thursday, with a rise of 7.3% recorded at 1:24 p.m. ET. This increase was triggered by positive comments from a Wall Street analyst about the company’s future.
Stacy Rasgon, an analyst at Bernstein, expressed a positive outlook for AMD, maintaining a ‘market perform’ rating and raising his price target from $235 to $265. Although this new target is only slightly above Wednesday’s closing price, it is notable that the stock had already surpassed this level earlier in the day.
Rasgon highlighted that AMD may shift its focus from selling personal computer (PC) chips to server and data centre chips, which typically have higher profit margins. He also mentioned AMD’s recent partnership with Meta Platforms, indicating potential growth for the company. The two have signed a multi-year deal for Meta to use six gigawatts of custom AMD AI chips in its data centre expansion.
However, Rasgon’s cautious stance contrasts with the broader market enthusiasm, where approximately 73% of analysts rate AMD as a ‘buy’ or ‘strong buy’. The average price target sits around £289, reflecting a positive view among analysts.
Having risen 189% over the past year, AMD’s stock is now valued at 104 times its earnings. The continued interest in artificial intelligence is expected to support AMD’s stock price in the future. As always, investors are encouraged to weigh this growth potential against the associated risks.
