One of the premier producers of graphics processing units (GPUs), Advanced Micro Devices (NASDAQ: AMD), has had an extended period of underperformance.
Despite being the main rival of Nvidia (NASDAQ: NVDA), AMD stock has failed to benefit from the artificial intelligence (AI) boom. In fact, the price of Advanced Micro Devices shares declined by 18% over the course of 2024.
While the semiconductor company is facing significant challenges, there are several silver linings at play.
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For one, AMD’s latest line of products stacks up rather well against Nvidia’s, at least per benchmarks. To boot, while the overnight success of Chinese AI startup DeepSeek caused an NVDA selloff and stoked fears regarding the tech sector’s high AI capital expenditures, Wall Street has generally doubled down on its bullish outlook regarding the issue.
Since the start of the year, the price of Advanced Micro Devices stock has declined by 2.67% — at press time, it was trading at $117.57.
In addition, the chipmaker will hold its Q4 2024 earnings call some 6 hours after the time of publication on February 4. Quite a few eminent Wall Street firms have revised their price targets on the stock as of late — so let’s take a closer look at the average outlook on AMD from equity analysts.
Wall Street maintains bullish outlook on AMD stock in spite of struggles
At present, 24 researchers track Advanced Micro Devices stock and issue ratings for it. A majority — 15, to be exact, deem it a ‘Strong Buy’, while 8 rate it a ‘Hold’. Only one analyst — HSBC’s Frank Lee, gave AMD shares a ‘Sell’ rating.
The average price forecast for AMD stock currently sits at $160.39 — a figure that equates to a 37.11% upside from current levels.
Most Wall Street firms remain bullish on AMD — but they have generally moderated their price targets as of late. Matt Bryson of Wedbush cut his price target to $150 from $200 — while Citi (NYSE: C) reduced theirs from $200 to $175.
On the other hand, Morgan Stanley (NYSE: MS) equity researcher Joseph Moore kept an ‘Equal Weight’ rating on AMD stock. However, his outlook is slightly less optimistic. Moore cut his price target from $158 to $147.
In a note shared with investors, the analyst cited lowered expectations as a positive factor, while also opining that the company’s server division will likely help buoy the results. Lastly, Moore added that the next catalysts for the stock “feel further out in time.” If met, his price forecast would equate to a 25.03% upside.
At a forward price-to-earnings (PE) ratio of just 22.73, AMD remains a potentially lucrative value play. On the whole, equity researchers are quite bullish — although there is no clear consensus regarding price targets. Readers should keep a close eye on any price target revisions in the coming days and weeks — as analysts will surely revisit their theses following the release of the company’s quarterly report.
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