Advanced Micro Devices (NASDAQ:AMD) Trading 6.4% Higher - Should You Buy?

Key Points

• AMD shares rose 6.4% to $545.09, supported by reports that the company may raise GPU and CPU prices by about 10%, potentially improving margins amid strong demand and tight supply.
• The bullish outlook centers on robust AI and data-center growth: quarterly revenue increased 50.1% year over year, while data-center revenue reportedly more than doubled. AMD is also expanding its ROCm software ecosystem to RISC-V servers as it seeks to compete with NVIDIA’s CUDA platform.
• Analysts maintain a generally positive view, with a consensus “Moderate Buy” rating and $565.12 price target, but valuation and competitive risks remain. AMD trades at a P/E ratio of about 140, faces new AI-chip competition from Huawei, and insiders sold more than $105 million of stock last quarter.

Advanced Micro Devices, Inc. (NASDAQ:AMD - Get Free Report) rose 6.4% during mid-day trading on Thursday . The company traded as high as $551.42 and last traded at $545.09. Approximately 28,170,370 shares changed hands during mid-day trading, a decline of 16% from the average daily volume of 33,436,703 shares. The stock had previously closed at $512.50.

Key Stories Impacting Advanced Micro Devices

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

• Positive Sentiment: Reported price increases support margins: Reports that AMD may raise GPU and CPU prices by roughly 10% are boosting expectations for improved revenue and profitability, particularly amid strong demand and constrained chip supply. AMD Stock Soars 5% on Reports of GPU and CPU Price Increases
• Positive Sentiment: Broad semiconductor rebound: AMD is leading a sector-wide recovery, with investors discounting near-term AI slowdown concerns and buying chipmakers including NVIDIA, Broadcom, Micron and Intel. The broader rally is providing additional momentum for AMD. AMD Jumps 7% as Semiconductor Rebound Reaches a Third Session
• Positive Sentiment: AI and data-center growth remain central to the bullish thesis: Recent commentary points to CPU and GPU ramps remaining on schedule, with prior quarterly revenue up about 50% year over year and data-center revenue up more than 100%. Analysts also continue to cite AMD’s opportunity to gain AI accelerator share. AMD rises as upbeat AI demand commentary and chip-sector rebound support shares
• Positive Sentiment: ROCm ecosystem expansion: AMD is working with SiFive to adapt its open-source ROCm AI software for RISC-V data-center servers, potentially broadening hardware compatibility and strengthening its alternative to NVIDIA’s CUDA ecosystem. Advanced Micro Devices Expands ROCm Support to RISC-V Datacenter Servers
• Neutral Sentiment: Technical and institutional support: AMD has moved above key recent trading levels, while institutional investors reportedly added shares during the second quarter. Several published price targets remain above the current market level, though the reported analyst median target is lower.
• Negative Sentiment: Competition and valuation risks persist: Huawei has introduced more than 10 AI chips aimed at NVIDIA, AMD and Intel, potentially increasing competitive pressure. AMD also trades at a demanding valuation, while extensive insider selling—including sales by CEO Lisa Su—could temper enthusiasm. Huawei Takes Aim at Nvidia and AMD with New AI Chipsets

Analyst Upgrades and Downgrades

AMD has been the subject of a number of recent analyst reports. Mizuho increased their price target on Advanced Micro Devices from $615.00 to $625.00 and gave the company an "outperform" rating in a research report on Monday, July 27th. JPMorgan Chase & Co. raised their target price on shares of Advanced Micro Devices from $385.00 to $550.00 and gave the stock a "neutral" rating in a report on Wednesday, August 5th. Jefferies Financial Group set a $650.00 price target on shares of Advanced Micro Devices in a report on Wednesday, August 5th. CLSA restated an "outperform" rating and issued a $710.00 price target on shares of Advanced Micro Devices in a research report on Wednesday, September 9th. Finally, Melius Research set a $660.00 price objective on shares of Advanced Micro Devices in a research report on Friday, July 24th. Three analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, ten have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, Advanced Micro Devices has an average rating of "Moderate Buy" and a consensus price target of $565.12.

Advanced Micro Devices Trading Up 6.4%

The firm has a market capitalization of $889.85 billion, a PE ratio of 140.13, a price-to-earnings-growth ratio of 5.23 and a beta of 2.48. 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 has a fifty day moving average of $494.24 and a 200-day moving average of $411.50.

Advanced Micro Devices (NASDAQ:AMD - Get Free Report) last announced its quarterly earnings results on Tuesday, August 4th. The semiconductor manufacturer reported $1.66 EPS for the quarter, beating the consensus estimate of $1.62 by $0.04. Advanced Micro Devices had a return on equity of 12.30% and a net margin of 15.58%.The business had revenue of $11.54 billion during the quarter, compared to analysts' expectations of $11.31 billion. During the same quarter in the previous year, the business posted $0.48 EPS. The firm's quarterly revenue was up 50.1% compared to the same quarter last year. On average, sell-side analysts anticipate that Advanced Micro Devices, Inc. will post 6.43 earnings per share for the current fiscal year.

Insider Transactions at Advanced Micro Devices

In other news, EVP Jean X. Hu sold 15,000 shares of Advanced Micro Devices stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $474.08, for a total value of $7,111,200.00. Following the transaction, the executive vice president owned 160,979 shares of the company's stock, valued at $76,316,924.32. This trade represents a 8.52% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Ava Hahn sold 2,993 shares of the company's stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $488.69, for a total transaction of $1,462,649.17. Following the sale, the senior vice president owned 26,623 shares of the company's stock, valued at $13,010,393.87. This trade represents a 10.11% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 213,838 shares of company stock worth $105,533,836. 0.50% of the stock is currently owned by company insiders.

Institutional Trading of Advanced Micro Devices

A number of hedge funds have recently bought and sold shares of the stock. Sarver Vrooman Wealth Advisors bought a new stake in shares of Advanced Micro Devices in the 4th quarter worth approximately $27,000. Cornerstone Financial Management LLC acquired a new position in shares of Advanced Micro Devices in the 4th quarter worth approximately $27,000. Basepoint Wealth LLC acquired a new stake in Advanced Micro Devices in the 4th quarter valued at $30,000. JNBA Financial Advisors lifted its holdings in shares of Advanced Micro Devices by 142.9% during the second quarter. JNBA Financial Advisors now owns 51 shares of the semiconductor manufacturer's stock valued at $30,000 after acquiring an additional 30 shares during the period. Finally, Graney & King LLC acquired a new stake in shares of Advanced Micro Devices during the 1st quarter worth about $31,000. 71.34% of the stock is owned by institutional investors.

Advanced Micro Devices Company Profile

Advanced Micro Devices, Inc NASDAQ: AMD is a semiconductor company that designs high-performance computing, graphics and adaptive-processing products. Its portfolio includes central processing units (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), field-programmable gate arrays (FPGAs) and adaptive system-on-chip products.

AMD serves customers across data centers, cloud computing, personal computers, gaming consoles, embedded systems and industrial applications.

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