Advanced Micro Devices (AMD) stock has gained 31% year-to-date, fueled by strong demand for its AI and data center chips. However, after peaking in July, the stock has slipped 14% over the past month, weighed down by rising competition in AI chips, mixed second-quarter results, and weak profit margins. Nonetheless, TipRanks’ A.I. Analyst gave AMD stock an Outperform rating, signaling confidence in the stock’s long-term potential.
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For context, TipRanks’ A.I. Stock Analysis provides automated, data-backed evaluations of stocks across key metrics, offering users a clear and concise view of a stock’s potential.
AI Analyst Breaks Down AMD Stock Outlook
According to TipRanks A.I. Stock Analysis, AMD stock scores 77 out of 100, with a price target of $190, implying an upside of 20%. That’s higher than Wall Street’s average target of $184.44. Meanwhile, the tool highlights both strengths that could drive the stock higher and risks that may limit future gains.
On the positive side, AMD’s revenue is rising fast, showing strong demand for its chips. In the second quarter, the company posted record sales of $7.7 billion, up 32% from a year ago, led by higher demand for server and PC processors. Strong cash flow also gives AMD room to invest in new products, reduce debt, and support growth. At the same time, AMD has also teamed up with International Business Machines (IBM) on quantum computing, a deal that broadens its technology and opens the way to new market opportunities.
Still, there are risks that investors should keep in mind. Export limits, especially U.S. restrictions on shipping advanced chips to China, remain a concern as they could slow AMD’s AI revenue and curb growth overseas. In addition, leadership changes may bring short-term challenges, making it harder to carry out plans without disruption, especially as AMD pushes deeper into AI and data center markets.
Also, weaker demand for data center AI chips could weigh on results, impacting its top-line growth.
Is AMD Stock a Buy, Sell, or Hold?
Overall, Advanced Micro Devices stock scores Wall Street’s Moderate Buy consensus rating based on 22 Buys and 12 Holds. The average AMD stock price target of $188.00 indicates 18.56% upside potential from current levels.
