Advanced Micro Devices (AMD) saw its stock increase by nearly 2% on Thursday morning. This rise shows positive investor sentiment. AMD is gaining ground in the semiconductor market, especially in server CPUs and AI technologies.
Strong demand from cloud and hyperscaler customers has made AMD optimistic about exceeding 20% growth in 20252.
AMD is also expanding its AI graphics processing units, expecting over 60% growth this year. Its EPYC and Instinct processors are in high demand for data centers and AI applications due to their performance, scalability, and cost-effectiveness. Additionally, AMD’s latest Ryzen update, the 9950X3D, is selling well, leading to plans for more production.
Analysts are optimistic about AMD, predicting a 45% upside on average. Although the first half of the year had some challenges, a solid earnings report could boost analysts’ price targets and drive stock price gains.
AMD’s valuation seems favorable given its growth, with earnings expected to rise at a high-teens rate in 2024, speeding up in later years.
However, AMD faces risks like possible tariffs and competition from NVIDIA. The company is addressing these issues by diversifying its manufacturing, including plans to produce key processors at Taiwan Semiconductor’s new Arizona facility.
As AMD works through these challenges, its success in executing its strategies and leveraging AI and data center trends will be vital for maintaining investor confidence and achieving long-term growth.