Why AMD Stock Is Jumping Today

Advanced Micro Devices (NASDAQ: AMD) stock is making gains in Monday's trading. The semiconductor company's share price was up 5.7% as of 10:45 a.m. ET.

AMD stock is gaining ground today following bullish coverage from Rosenblatt. The firm named the chip stock as one of its top investment ideas for the first half of 2025.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

AMD gains on bullish analyst coverage

Before the market opened today, Rosenblatt published new coverage on AMD stock. The firm gave a buy rating on the stock and issued a one-year price target of $250 per share. As of this writing, that would imply additional upside of roughly 100%.

Rosenblatt's analysts think that AMD's expanding share in the markets for central processing units (CPUs) and graphics processing units (GPUs) will help power big gains for the stock. The team sees a strong outlook for the semiconductor specialist's Epyc CPUs in the server and data center segment, and it also expects strong performance from the company's M1350 and M1400 GPUs.

What comes next for AMD stock?

While Nvidia and many other artificial intelligence (AI) stocks have posted massive gains across this year's trading, AMD's performance has been relatively soggy. Despite today's gains, AMD stock is down roughly 15% across 2024 and is still trading in a range close to its 52-week low. With shares underperforming this year, the stock has recently been getting attention from investors betting on a potential rebound trade.

Even though AMD's data center segment has been posting explosive growth, the results have come in below the expectations of some analysts. Investors are also worried about whether the company will be able to sustain momentum in the space. Thus far, the company doesn't appear to be catching up to Nvidia in terms of advanced GPU performance for artificial intelligence applications.

On the other hand, the demand outlook for AI infrastructure continues to look quite strong -- and the rising tide of spending in the space could continue to lift AMD's boat even though Nvidia's processors continue to be the go-to choice for leading tech companies. The overall AI revolution is also likely still in very early innings. So while cyclical and competitive risks are present, AMD stock could be a worthwhile portfolio addition at current prices.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 901% — a market-crushing outperformance compared to 173% for the S&P 500.*

They just revealed what they believe are the 10 best stocks for investors to buy right now… and Advanced Micro Devices made the list -- but there are 9 other stocks you may be overlooking.

See the 10 stocks »

*Stock Advisor returns as of December 23, 2024

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.