AMD Stock: I’m Buying This Dip

Summary:

• I upgraded Advanced Micro Devices, Inc. to “Buy” at $155/share due to favorable valuation and strong data center prospects; despite a 12% decline, I maintain this rating and will buy more shares.
• AMD’s Q3 2024 showed record growth in the Data Center and Client businesses, with revenue at $6.8 billion and gross margin rising to 53.6%.
• Strong demand for EPYC CPUs and Instinct GPUs, along with AI-powered PCs, positions AMD for future growth despite challenges in Gaming and Embedded segments.
• With a strong product roadmap and likely improving margins shortly, AMD seems to be well-poised to capitalize on the secular patterns of AI adoption, being the cheapest among major chipmakers.
• My medium-term price objective of $224.1/share, which is 63.5% above today’s stock price, leads me to a “Buy” rating again. I’m going to buy this dip in AMD.

My Thesis Update

I initiated coverage on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock on March 1, 2024, with a “Hold” rating, outlining my concerns about the sustainability of the stock’s rally at that time. In June 2024, I reiterated my “Hold” rating again despite

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Struggle to access the latest reports from banks and hedge funds?

With just one subscription to Beyond the Wall Investing, you can save thousands of dollars a year on equity research reports from banks. You’ll keep your finger on the pulse and have access to the latest and highest-quality analysis of this type of information.