Analysts expect a 49% rise, and here’s why – Magic Post

Analyst ratings can have a significant impact on stock price performance. This may be the reason why shares Advanced Micro Devices Company Nasdaq: AMD They rose 4.2% in the week ending January 17, 2025. In this case, it was Loop Capital that initiated coverage on AMD shares with a Buy rating and $175 price target.

Today’s advanced micro-devices

AMD

Advanced micro devices

$121.46 +3.02 (+2.55%)

As of 01/17/2025 at 04:00 PM ET

52 week range

$114.41

▼

$227.30

P/E ratio

109.42

Price target

$178.61

Loop Capital is just one analyst firm bullish on AMD stock. An Advanced Micro Devices analyst forecast on MarketBeat gives the stock a price target of $178.61, which is 49% higher than its January 17 price.

That’s why it’s useful to understand why analysts give the stock a particular rating. In this case, Loop believes that AMD stock, which is still down 24.4% in the past 12 months even after the recent rally, does not accurately reflect “a certain degree of success in accelerated computing…and unique market share expansion opportunities in general-purpose computing.” Within the general computer and server markets.

This should be music to the ears of AMD shareholders who were in for a shock last year even though the company generated higher revenues and profits year over year. However, it appears that analysts like Loop Capital may recognize the opportunity in AMD stock.

Among technology stocks, the chip market is often a “what has it done for me lately” sector, and AMD’s slow and steady performance hasn’t been enough to excite investors. In fact, despite announcing a large slate of products that the company will release in 2025, AMD stock has fallen as investors continue to focus narrowly on the GPU market when it comes to chip stocks.

However, this is where the bullish case for AMD comes into play. The company is launching MI300X graphics processing units (GPUs) in the first quarter of 2025. The company did not provide many details about the GPUs at the Consumer Electronics Show (CES) in January. This is a bit strange because this is where the company is most likely to gain market share Nvidia company Nasdaq: NVDA.

First of all, AMD will have GPUs to offer as companies look for alternatives to NVIDIA. With the sale of NVIDIA’s Blackwell units, there is an opportunity for another company to get its foot in the door.

Before considering investing in AMD stock, you’ll need to consider why the MI300X series is important to the company. Featuring unparalleled memory and bandwidth, the MI300X is designed to handle AI inference workloads.

To answer the next question that many investors will ask, AI heuristics is what happens when an AI model begins to recognize patterns in data that it has never seen before. This allows the model to reason and perform predictive analysis similar to human capabilities.

Now, keep in mind that the growing demand for AI training and inference is expected to be the biggest reason to believe that AI workloads will grow at a compound annual growth rate (CAGR) through 2027.

What is the opportunity for advanced micro-devices? The AI ​​market is expected to grow from $780 billion to $990 billion by 2027. So Advanced Micro Devices only needs to capture a small market share to double its current annual data center revenue, which could add nearly 50% to revenue The company’s annual

With that as background, you can begin to understand why advanced microdevices are so undervalued compared to their opportunity. This means that this may be the ideal time to start averaging in a position to ensure you are able to make a strong move to the upside following the report.

The technical outlook is favorable for traders. AMD stock is trading at a discount to its 50-day moving average and is close to its 52-week low. Additionally, the Relative Strength Index (RSI) is around 40, which puts the stock near the oversold range.

The company reported earnings on February 4, and options traders were relatively bullish. The February 7 options series on AMD stock shows the largest volume of call options exercised on AMC stock at $130. This price would push it near an inflection point with the 50-day simple moving average.