Advanced Micro Devices (NASDAQ:AMD) stock has already navigated several headline-making developments in the early months of the Trump administration – events with meaningful implications for entire industries and individual companies alike. The latest announcement, however, sent AMD shares up ~7% this week.
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In what experts are calling a pay-for-play arrangement, the White House will allow AMD and Nvidia to export advanced semiconductor chips to China in exchange for 15% of their sales revenues in this market. Investors appear to support the deal, as it removes the worst-case scenario of losing Chinese market access entirely.
That sense of optimism feeds into AMD’s already blistering run. Since early April, the stock has more than doubled on the strength of hyperscaler demand, major partnership wins, and a strong earnings report.
Now the question isn’t whether AMD has momentum, but how far it can carry – and one seasoned investor, known as JR Research, is betting the answer is an emphatic “very far.”
“Continue to ride on AMD’s comeback story as the next phase in its AI chip business starts unfolding,” urges the 5-star investor, who ranks among the top 1% of TipRanks’ stock pros.
JR expects AMD’s AI chips to scale meaningfully in the coming quarters as hyperscalers show growing interest. While acknowledging that Nvidia’s full-stack solutions give it a moat AMD can’t easily breach, the investor argues that being the second-largest player in a rapidly expanding industry is still an enviable position.
“As long as the overall TAM in AI chips can continue to grow steadily, it should align broadly with AMD’s $500B medium-term outlook,” JR says.
Valuation also remains a selling point. With an EBITDA multiple below its 5-year average and a PEG ratio more than 20% under the sector median, the investor sees plenty of upside left. Moreover, Trump’s “transactional diplomacy,” while introducing some restrictions, is still far preferable to a total shutdown of Chinese market access.
“AMD remains in the nascent stages of accelerating the growth cadence in its AI revenue,” JR sums up. “It’s still way too early to take profits in AMD stock.”
Not surprisingly, then, JR rates AMD shares a Buy. (To watch JR Research’s track record, click here)
That’s a view shared by many on Wall Street. With 26 Buy and 12 Hold ratings, AMD enjoys a consensus Moderate Buy. (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.