Advanced Micro Devices (NASDAQ:AMD) stock has been staging a strong comeback since hitting a post-Liberation Day low in early April. Shares have surged nearly 50% since then, fueled by the U.S.-China tariff pause and renewed confidence in ongoing AI-related spending from hyperscalers.
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That momentum was backed by AMD’s Q1 2025 performance, which saw revenue climb 36% year-over-year to $7.4 billion. The all-important data center segment also jumped 57% from a year ago, reaching $3.7 billion last quarter.
The company also stands poised to benefit greatly from Saudi Arabia’s AI push, having recently signed a $10 billion deal with a subsidiary of the Kingdom’s sovereign wealth fund.
And the good news kept coming for investors this week, as AMD’s Board of Directors just approved a $6 billion stock repurchasing plan, which increased the company’s total repurchase authority to some $10 billion.
Still, despite these advances, AMD continues to operate under the heavy shadow of Nvidia. The persistent comparison to the AI chip giant has been a key factor weighing on AMD’s stock performance through the second half of 2024 and into early 2025, even as it steadily closes the gap.
However, one top investor, known by the pseudonym Geneva Investor, doesn’t see any issue in being second best.
“While AMD is never going to match Nvidia, this is also the reason why it’s a great investment,” posits the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
In Geneva’s view, AMD doesn’t need to be Nvidia, it just needs to play smart, capture its slice of the booming AI chip market, and keep doing what it does best. Its smaller size, the investor argues, also means a much more attractive valuation.
“I think the current valuation offers a vast margin of safety. I believe an investment in the stock today is asymmetric in nature, with outsized returns of up to ~10X possible,” adds Geneva.
That’s not to say that AMD is not making inroads against Nvidia. Now that the AI industry has entered its inference phase, Geneva notes that there are already indications that AMD could beat Nvidia’s products for some AI inference applications.
“Even if AMD sticks to the growth that registered in Q1, I see an upside of ~60%,” concludes Geneva Investor, who rates AMD shares a Buy. (To watch Geneva Investor’s profile, click here)
Wall Street is also seeing dollar signs on the horizon. With 22 Buy and 9 Hold recommendations, AMD boasts a Moderate Buy consensus rating. Its 12-month average price target of $126.14 has an upside of ~9%. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.