AMD is on the move again.
Advanced Micro Devices (AMD 0.17%) 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.
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Edward Jones calls AMD a buy
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.
Is AMD a buy at $155?
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.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy.
