AMD’s Growth Potential and Strategic Positioning Drive Buy Rating Amid AI Market Opportunities

Bank of America Securities analyst Vivek Arya maintained a Buy rating on Advanced Micro Devices (AMD – Research Report) yesterday and set a price target of $130.00.

Vivek Arya has given his Buy rating due to a combination of factors that highlight Advanced Micro Devices’ (AMD) strong potential for growth and profitability. One of the key reasons is AMD’s expected earnings per share (EPS) power, which is projected to be significantly above the consensus estimates for the coming years. This is driven by AMD’s continued market share gains in the CPU sector for both servers and PCs, as well as the company’s strategic positioning in the rising AI market, which includes substantial contracts in the Middle East and a promising pipeline of AI-related products.
Another factor contributing to the Buy rating is the valuation of AMD, which is considered attractive given the company’s consistent management execution and ability to grow its topline and EPS at impressive rates. Despite the current lower ownership among large-cap US active fund managers, the potential for AMD to capture a meaningful share of the AI accelerator market is seen as a significant opportunity. Additionally, the company’s recent expansion of its stock buyback program further underscores confidence in its future prospects. However, Arya also notes potential risks such as geopolitical uncertainties, competitive pressures from larger AI players, and the possibility of a turnaround by Intel under new management.

Arya covers the Technology sector, focusing on stocks such as Nvidia, Intel, and Advanced Micro Devices. According to TipRanks, Arya has an average return of 12.8% and a 55.35% success rate on recommended stocks.

In another report released on May 19, Mizuho Securities also maintained a Buy rating on the stock with a $135.00 price target.