AMD Stock Receives "Buy" Rating from Wall Street Analyst, Potential for 200% Gain

1 Wall Street Analyst Just Called AMD Stock a Buy. Is It? | The Motley Fool

Advanced Micro Devices (AMD 0.15%) has yet to see the kind of soaring growth that chip stocks like Nvidia have, but that doesn't mean it hasn't taken part in the AI boom. Shares of the diversified chip specialist, which is best known for PC CPUs, are up 141% since the start of 2023. In recent weeks, a number of bullish news items have come out for AMD, including a strong second-quarter earnings report. Now, another Wall Street bull is lining up behind the stock. Financial services firm Edward Jones put out a note initiating coverage on AMD with a buy rating and put the shares in the firm's stock "focus list," indicating elite status. Edward Jones predicted that AMD would deliver "outsize growth" in data center infrastructure as it's coming off a quarter where sales more than doubled in the data center segment and demand remains exceptionally strong as indicated by Nvidia's results. It also has an opportunity to cross-sell new products into the embedded segment following its acquisition of Xilinx in 2022. In addition to the strong earnings report at the end of July, AMD has benefited from the collapse of rival Intel, Nvidia's delay in its new Blackwell platform, and the recent $4.9 billion acquisition of ZT system, which makes both manufacturing and design systems for AI infrastructure. AMD is moving quickly to capture the AI opportunity in front of it, and it's earning more support on Wall Street. It will take time for profits to ramp up, but the stock has strong upside potential especially given its momentum in the data center category. I think it's a buy now.

Is Advanced Micro Devices Stock Going to $200? 1 Wall Street Firm Thinks So. | The Motley Fool

Soaring demand for Advanced Micro Devices' (AMD 1.28%) data center chips sent the stock to a high of $227 earlier this year. It is currently off those highs -- around $157 -- and offering an attractive entry point, according to Wedbush. The firm maintained an outperform (buy) rating on the stock this week and also kept its price target at $200, representing upside of 27% over the current share price. Wedbush is optimistic about AMD's recent acquisition of ZT Ssystems, a leading provider of artificial intelligence (AI) infrastructure to data center operators. Here's what this means for AMD's growth, and why it could help the stock return to its previous high. On Monday, AMD announced the acquisition of ZT Systems in a cash and stock deal. "ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities," AMD CEO Lisa Su said in a statement. Some investors see the acquisition as a desperate attempt to catch up to Nvidia, which is dominating the market for high-powered graphics processing units (GPUs) and AI systems for data centers. Wedbush disagrees. The firm likes that AMD was able to acquire ZT at a discounted valuation. AMD will look to sell off ZT's manufacturing assets and retain the more valuable design and services business. Most importantly, Wedbush sees the $4.9 billion deal as confirmation of AMD's growth opportunity in the growing $236 billion data center market. AMD is growing right along with it. Its data center revenue skyrocketed 115% year over year last quarter, and the acquisition of ZT Systems should only strengthen its offering to the leading data center players in the world. AMD is still seeing weak demand in other areas of its business, such as gaming GPUs, but once it's firing on all cylinders again, the stock may already be well past the analyst's price target.