- Is AMD Stock a Buy Right Now? Analysts Say Yes, with Potential 85% Upside
After reaching record highs in March, Advanced Micro Devices (NASDAQ:) shares have been struggling. Despite a strong start to the year with a 300% rally, the stock has since dropped more than 40%, sparking concerns among investors.
Like many tech stocks, AMD faced pressure in late July and early August due to fears about the Fed’s rate cuts. While the market rebounded in August, AMD continued to trend downwards, failing to match its July high and entering a possible downtrend.
Although AMD exceeded analyst expectations in its recent earnings report, its high price-to-earnings (P/E) ratio of 160 compared to competitors like NVIDIA and Qualcomm has raised valuation concerns. The stock’s underperformance and inflated P/E ratio have led to doubts about its ability to meet investors’ expectations.
Analysts Remain Bullish
Despite the stock’s recent struggles, several analysts have maintained a positive outlook on AMD. Wedbush, Susquehanna, and Rosenblatt Securities have reiterated their buy ratings, with price targets of $200 and $250, indicating an 85% upside potential.
Edward Jones and TD Cowen also rated the stock a buy, with a price target of $210, suggesting a more than 50% upside from the recent trading price.
Industry Factors and Entry Opportunities
While semiconductor sales dipped in July, overall year-on-year growth remains strong, driving optimism for the industry. Citi’s Buy rating on AMD reflects this positive sentiment, emphasizing the potential for growth in the coming months.
Investors considering AMD as a bargain entry opportunity should monitor the stock’s performance relative to the market. Maintaining a position above $120, even during market weakness, could signal a potential rally when equities start to recover.