There are some clear concerns for chip stocks out there. That’s mainly due to the impact of the consumer market. But for AMD (NASDAQ:AMD), there’s one investor that clearly believes in the company going forward. Sufficiently so, in fact, that there’s new investment coming in, and AMD is up fairly nicely in Thursday afternoon trading.
The latest reports have none other than Dan Loeb’s Third Point hedge fund stepping in. Third Point took a “passive” stake in the company, picking up a substantial chunk of shares when AMD was at a low ebb. This isn’t the first time Loeb has backed a chipmaker, though; previously, Loeb had a substantial chunk of Intel (NASDAQ:INTC). While there, he encouraged Intel to seek “strategic alternatives” thanks to Intel’s losses to TSMC (NASDAQ:TSM).
Loeb steps in at a good time for AMD. It’s making a real comeback, with shares up 22% over this time last year. Plus, AMD also has a potent new chip that should draw what interest is left from the home and gaming PC crowd. The new Ryzen 9 7950X3D chip is said to be sufficient to push even Nvidia’s (NASDAQ:NVDA) chips to their fullest. Some benchmarking suggests that it’s not the most powerful chip AMD has ever released, but it’s certainly got a lot of horsepower for those higher-end uses.
Meanwhile, Wall Street seems to be about as enthusiastic as Dan Loeb is. Right now, analyst consensus calls AMD stock a Moderate Buy. Thanks to its average price target of $93.18, it offers 15.71% upside potential.