Why Advanced Micro Devices (AMD) Stock Popped on Thursday

Shares of Advanced Micro Devices (NASDAQ: AMD) charged sharply higher Thursday, climbing arsenic overmuch arsenic 8.2%. As of 1:24 p.m. ET, the banal was inactive up 7.3%.

The catalyst that sent the semiconductor specializer higher was bullish commentary by a Wall Street analyst.

Bernstein expert Stacy Rasgon remains bullish connected AMD, maintaining a marketplace execute (hold) standing and raising his terms people to $265 from $235. That summation was hardly 3% supra Wednesday's closing price, and it's worthy noting that the banal had already eclipsed that new, higher terms people successful aboriginal trading connected Thursday.

The expert believes that, fixed the existent marketplace conditions, AMD volition merchantability less PC chips and much server and information halfway chips, which transportation higher margins. Furthermore, Rasgon cited AMD's woody with Meta Platforms, inked earlier this year, arsenic offering imaginable upside for the company. The brace signed a multiyear, multigeneration woody that volition spot Meta deploy six gigawatts of customized variations of AMD's MI450 AI chips arsenic portion of the company's information halfway build-out.

The expert lags his peers successful his appraisal of AMD's prospects. Wall Street is bullish connected AMD, with 73% of analysts who screen the banal issuing a bargain oregon beardown bargain rating. Furthermore, the mean terms people of astir $289 is astir 12% higher than Wednesday's close, though the banal continues to determination higher.

AMD has been connected a teardrop implicit the past year, up 189%. However, with those gains comes a commensurate summation successful its valuation, arsenic the banal is presently selling for 104 times net and 41 times guardant earnings. Artificial quality (AI) has staying power, which could proceed to thrust AMD banal higher good into the future.

Investors should equilibrium the ongoing accidental against their hazard tolerance and the imaginable for aboriginal volatility.

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