Advanced Micro Devices has turned a Wall Street skeptic into a bull with its progress in artificial intelligence chips and computing systems. AMD stock rose on Monday.
Melius Research analyst Ben Reitzes upgraded AMD stock to buy from hold. He also raised his price target to 175 from 110.
On the stock market today, AMD stock advanced 1% to close at 129.58.
"We are upgrading shares of AMD given our view that many things have changed for the better since the beginning of the year," Reitzes said in a client note Monday. "If we are right, the stock has a lot more to go, despite missing the initial move off the bottom."
In particular, AMD has made substantial advances in AI accelerators and computing systems, he said. AMD is likely to benefit as hyperscale cloud computing companies and others invest in systems for AI inferencing over the next three years, Reitzes said.
On June 12, AMD touted the price and performance advantages of its AI data center systems over rival Nvidia at a company event. It also previewed full-rack AI systems for customers.
AMD Stock Is Volatile
Reitzes cautioned that AMD stock is "highly volatile." This is evidenced by its move from 147 to 227 in 2024, only to fall as low as 76 this year.
"Our hunch is that we are in the middle of another move to the upside again as investors are about to envision even bigger GPU (graphics processing unit) figures in 2026-2028 given a sustainable surge in inferencing, where investing in AMD's platform seems to be more attractive for hyperscalers and sovereigns," Reitzes said.
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