A sharp increase in the need for AMD (Advanced Micro Devices) ‘ ( AMD 1.11% ) Earlier this year, data center chips drove the stock price up to $227. However, the price has since dropped to about $157, which Wedbush suggests is a compelling opportunity to invest.
This week, the company continued to give the stock an outperform (buy) rating and also retained its price target priced at $200, which indicates a potential increase of 27% compared to the current stock price.
Wedbush has a positive outlook on AMD’s latest purchase of ZT Ssystems, a top provider of machine intelligence infrastructure to data center operators. This development signifies potential growth for AMD and could be a catalyst for the stock to climb back to its former peak.
Reasons to consider purchasing AMD stock
On Monday, AMD revealed that it has acquired ZT Systems through a combination of cash and stock. In a statement, AMD CEO Lisa Su mentioned, “ZT brings exceptional expertise in systems design and rack-scale solutions, which will greatly enhance our AI systems for data centers and improve our ability to support customers.”
Some investors view the acquisition as a frantic effort to keep pace with Nvidia , which is leading the market in high-powered units for processing graphics (GPUs) and artificial intelligence solutions for data centers.
Wedbush has a different opinion. The company appreciates that AMD managed to purchase ZT at a reduced valuation. AMD plans to sell ZT’s manufacturing assets but keep the more valuable design and services division.
Wedbush considers the $4.9 billion agreement as evidence of AMD’s potential for expansion within the expanding $236 billion data center industry. AMD is experiencing growth parallel to this market. In the last quarter, its data center revenue surged by 115% compared to the previous year, and acquiring ZT Systems is expected to enhance its services for the top data center companies globally.
AMD is currently experiencing low demand in other segments of its business, like gaming GPUs. However, by the time the company fully recovers, its stock might already have exceeded the analyst’s predicted price target.
Is it a good idea to invest $1,000 in Advanced Micro Devices at the moment?
Prior to purchasing shares in AMD (Advanced Micro Devices) take this into account:
The Motley Fool is a company that provides financial advice and investment guidance. Stock Advisor The analysis team has recently discovered what they consider to be the 10 best stocks for investors to consider purchasing at this time… and AMD (Advanced Micro Devices) wasn’t part of this group. The 10 stocks that were selected have the potential to generate significant returns in the future.
Consider when Nvidia created this list onOn April 15, 2005, if you had put $1,000 into the investment we suggested, you would possess $779,735 !*
It’s important to mention Stock Advisor the overall average return is762% — an exceptional performance that significantly surpasses the market compared to 164% for the S&P 500. Be sure to check out the newest top 10 list.
Take a look at these 10 stocks
*Stock Advisor performance data as of August 12, 2024
