Advanced Micro Devices (NASDAQ:AMD) stock has not had many bright spots over the past year, even though the company plays a central role in supplying AI chips and delivered record revenues in Q4 2024. Despite these achievements, AMD shares have been on quite the slump, tumbling ~40% over the past 12 months.
Concerns over slowing capital spending by hyperscalers, export restrictions to China, and the looming threat of a trade war have collectively dampened enthusiasm. AMD’s lukewarm guidance for Q1 2025 has further exacerbated investor worries.
Even so, AMD isn’t standing still. The company is doubling down on its AI ambitions, looking to expand its presence in the rapidly growing data center market. Its next-generation AI accelerator, the MI350, is slated for a mid-2025 launch, with CEO Lisa Su highlighting strong customer demand and accelerated development progress during the Q4 earnings call.
Against this backdrop, some investors see opportunity taking shape. One such investor, known by the pseudonym Oakoff Investments, believes the recent pullback could offer an attractive entry point for those betting on AMD’s longer-term potential.
“AMD’s fundamentals remain strong with promising AI and data center growth, making the recent stock price dip an attractive buying opportunity,” explains the investor.
Oakoff is bullish regarding AMD’s continued advances with its new generations of CPUs and GPUs, noting that the latest MI350 series is expected to provide a “great leap in AI performance.” Needless to say, the investor believes this bodes well for the company going forward.
“AMD has been consistently gaining market share in the server CPU market thanks to the strength of its EPYC portfolio,” notes the investor. “I’m not seeing any major risks to its CPU dominance in the next few years.”
In addition, Oakoff posits that the bulk of AMD’s revenues will continue to move toward the lucrative Data Center segment. The investor notes that this strategy is bearing fruit for the company, as Data Center EBIT for full-year 2024 grew by 175% year-over-year – while revenues also expanded by 69% year-over-year in Q4 2024.
“I believe AMD is quite well positioned in today’s still bullish (so semis) environment where we see strong demand from AI infrastructure builders and so-called ‘AI enablers,’” concludes Oakoff. The investor is therefore rating AMD a Strong Buy. (To watch Oakoff Investments’ track record, click here)
Wall Street, at large, also holds a positive outlook on AMD, supported by 25 Buys, 11 Holds, and a single Sell rating, cumulatively assigning AMD a consensus Moderate Buy rating. The 12-month average price target of $147.81 indicates a potential upside of ~39% over the next year. (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.