Advanced Micro Devices (NASDAQ:AMD) Stock Jumps 3% – Still a Buy?

Advanced Micro Devices, Inc. (NASDAQ:AMD)’s share price was up 3% on Friday. The company traded as high as $645.46 and last traded at $633.91. Approximately 19,298,957 shares were traded during mid-day trading, a decline of 41% from the average session volume of 32,866,156 shares. The stock had previously closed at $615.73.

Advanced Micro Devices News Roundup

Here are the key news stories impacting Advanced Micro Devices this week:

• Positive Sentiment: $8.2 billion World Labs acquisition: AMD plans to acquire Fei-Fei Li’s spatial-intelligence AI startup in an all-stock transaction. Management expects the technology to help guide future chip development and expand AMD’s opportunity beyond the current GPU race. AMD bets on AI demand by buying World Labs
• Positive Sentiment: Evidence of accelerating AI demand: Hewlett Packard Enterprise secured a $1.2 billion Vultr order involving AMD Helios AI racks, providing a tangible data-center deployment signal for AMD’s processors and accelerators. HPE CFO discusses $1.2B deal with Vultr to deploy AMD Helios AI racks
• Positive Sentiment: Broad semiconductor strength and easier-rate expectations: Chip stocks rallied after weaker U.S. employment data reduced expectations for another Federal Reserve rate increase. AMD also benefited from investors’ view that it and Broadcom could lead the next phase of AI data-center construction. AMD stock gains, here’s why
• Neutral Sentiment: Long-term growth versus valuation: Bullish commentary points to expanding data-center revenue, autonomous-AI CPU demand, and large potential AI markets. However, AMD’s roughly $1 trillion market capitalization and elevated earnings multiple mean future gains depend on sustained growth and successful execution.
• Negative Sentiment: Risks remain substantial: The World Labs deal could dilute shareholders, while custom CPUs from hyperscalers may pressure AMD’s server market. Investors are also debating whether the recent rally has moved the stock near fair value, and some bearish analysts have expanded short positions. Advanced Micro Devices Is Spending $8.2 Billion to Learn What AI Needs Next

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on AMD shares. Barclays downgraded Advanced Micro Devices from an “overweight” rating to an “underweight” rating in a report on Friday, June 12th. Wedbush reaffirmed an “outperform” rating and set a $600.00 price target on shares of Advanced Micro Devices in a research report on Wednesday, August 5th. William Blair restated a “market perform” rating on shares of Advanced Micro Devices in a research note on Friday, July 24th. Morgan Stanley upped their target price on Advanced Micro Devices from $410.00 to $465.00 and gave the company an “equal weight” rating in a research report on Wednesday, August 5th. Finally, Jefferies Financial Group set a $650.00 price target on shares of Advanced Micro Devices in a research report on Wednesday, August 5th. Three research analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, ten have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $567.62.

Advanced Micro Devices Stock Performance

The company has a debt-to-equity ratio of 0.03, a current ratio of 2.61 and a quick ratio of 1.91. The company’s 50-day moving average price is $510.41 and its two-hundred day moving average price is $443.02. The company has a market capitalization of $1.03 trillion, a price-to-earnings ratio of 162.96, a PEG ratio of 6.35 and a beta of 2.45.

Advanced Micro Devices (NASDAQ:AMD) last issued its earnings results on Tuesday, August 4th. The semiconductor manufacturer reported $1.66 earnings per share for the quarter, topping analysts’ consensus estimates of $1.62 by $0.04. The business had revenue of $11.54 billion during the quarter, compared to the consensus estimate of $11.31 billion. Advanced Micro Devices had a return on equity of 12.30% and a net margin of 15.58%.The firm’s revenue for the quarter was up 50.1% on a year-over-year basis. During the same period in the previous year, the company posted $0.48 earnings per share. On average, equities research analysts anticipate that Advanced Micro Devices, Inc. will post 6.43 EPS for the current fiscal year.

Insider Buying and Selling at Advanced Micro Devices

In related news, CEO Lisa T. Su sold 70,000 shares of the company’s stock in a transaction dated Thursday, September 10th. The shares were sold at an average price of $506.80, for a total value of $35,476,000.00. Following the sale, the chief executive officer owned 3,032,156 shares in the company, valued at $1,536,696,660.80. This represents a 2.26% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Forrest Norrod sold 17,261 shares of the firm’s stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $503.05, for a total value of $8,683,146.05. Following the completion of the transaction, the executive vice president owned 363,317 shares in the company, valued at $182,766,616.85. This represents a 4.54% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 213,838 shares of company stock worth $105,533,836 in the last quarter. Company insiders own 0.50% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Bank of America Corp DE purchased a new position in shares of Advanced Micro Devices during the 2nd quarter valued at about $7,022,226,000. Cardano Risk Management B.V. bought a new position in Advanced Micro Devices during the 4th quarter valued at approximately $1,000,783,000. BlackRock Inc. lifted its stake in Advanced Micro Devices by 3.1% in the second quarter. BlackRock Inc. now owns 150,301,510 shares of the semiconductor manufacturer’s stock worth $87,311,650,000 after acquiring an additional 4,535,126 shares during the period. Franklin Resources Inc. boosted its stake in shares of Advanced Micro Devices by 340.1% during the 4th quarter. Franklin Resources Inc. now owns 4,747,834 shares of the semiconductor manufacturer’s stock valued at $1,016,796,000 after purchasing an additional 3,669,054 shares in the last quarter. Finally, Jupiter Topco LLC purchased a new position in shares of Advanced Micro Devices during the 2nd quarter worth approximately $2,084,651,000. Institutional investors own 71.34% of the company’s stock.

About Advanced Micro Devices

Advanced Micro Devices, Inc (NASDAQ: AMD) is a semiconductor company that designs high-performance computing, graphics and adaptive computing products. Its offerings serve data centers, personal computers, gaming systems, embedded devices and other specialized markets.

AMD’s product portfolio includes Ryzen processors for desktop and notebook computers, EPYC server processors, Radeon graphics products, and Instinct accelerators designed for artificial intelligence and high-performance computing workloads.