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Advanced Micro Devices (AMD) has seen its stock price come off the boil over the last few months—so does this mean there’s a buying opportunity?
Shares in the US-based semiconductor manufacturer hit $211.38 in March on the back of strong demand and upbeat management comments about the benefits of artificial intelligence.
However, its guidance disappointed the market, leading to a 34% drop in the share price to $138.93 as the market closed on November 18, 2024.
In our AMD stock forecast, we examine the company’s outlook, analyze why it may look attractive, and reveal analysts’ AMD stock predictions for 2025 and beyond up to 2030.
Key Takeaways
- AMD powers the world’s fastest supercomputer, El Capitan, as of November 2024.
- Its stock hit an all-time high closing price of $211.38 in March 2024.
- The stock price has fallen almost 16% over the past six months.
- AMD achieved revenue of $6.8 billion in the first quarter.
- Wall Street analysts view AMD stock as a ‘moderate buy’ as of November 19, 2024.
Summary of the Latest AMD Stock Predictions
| AMD Stock Forecast (as of November 19, 2024) |
1-Year Forecast | 2027 (November) | 5-Year Forecast (November 2029) |
|---|---|---|---|
| MarketBeat | $192.79 | – | – |
| WalletInvestor | $154.99 | $198.03 | $235.83 |
| TipRanks | $187.04 | – | – |
| CoinCodex | $230.29 | – | $308.24 |
AMD Stock Analysis
How have the holders of Advanced Micro Devices stock fared over the last 12 months and what have been the factors behind this performance?
On the surface, investors in AMD have enjoyed a pretty positive year. The stock rose 15% to $138.93 as the market closed on November 18, 2024.
However, the journey has been a bit more volatile than the headline numbers suggest, as the stock hit its all-time high closing price of $211.38 in March this year.
Since the company announced third-quarter results at the end of October 2024, the stock is down around 11%. This was mainly due to disappointment about its revenue forecast.
The confirmation of layoffs, which has seen roughly 1,000 employees affected, has also unsettled investors.
AMD News: World’s Fastest Computer
AMD announced that El Capitan, powered by the AMD Instinct MI300A APU, has become the world’s fastest supercomputer as of November 2024.
Today, we are proud to announce that El Capitan, built in partnership with @HPE and @Livermore_Lab and powered by AMD, was named the most powerful supercomputer on the Top 500 list at #SC24. El Capitan is the second exascale supercomputer for HPE and AMD, and we are committed to… pic.twitter.com/2Wv7ETC9YC
— AMD (@AMD) November 18, 2024
The El Capitan supercomputer, built by Hewlett Packard Enterprise, is housed at Lawrence Livermore National Laboratory (LLNL).
According to Forrest Norrod, the company’s executive vice president and general manager, AMD is “driving the future” of computing.
“We are thrilled to see El Capitan become the second AMD powered supercomputer to break the exaflop barrier and become the fastest supercomputer in the world,” he said. “Showcasing the incredible performance and efficiency of the AMD Instinct MI300 APUs, this groundbreaking machine is a testament to the dedicated work between AMD, LLNL and HPE.”
Financial Results Announced
AMD announced revenue of $6.8 billion for the third quarter of 2024. This represented a remarkable 18% increase over the $5.80 billion achieved in the same period last year.
The gross profit came in at $3.5 billion, up 24% on the previous year’s $2.74 billion, while the gross margin was up three percentage points to 50%.
Net income, meanwhile, was $771 million. This represented a 158% improvement over the $299 million achieved in the third quarter of 2023.
| GAAP Quarterly Financial Results | Q3 2024 | Q3 2023 | Y/Y |
|---|---|---|---|
| Revenue ($M) | $6,819 | $5,800 | Up 18% |
| Gross profit ($M) | $3,419 | $2,747 | Up 24% |
| Gross margin | 50% | 47% | Up 3 ppts |
| Operating expenses ($M) | $2,709 | $2,533 | Up 7% |
| Operating income ($M) | $724 | $224 | Up 223% |
| Operating margin | 11% | 4% | Up 7 ppts |
| Net income ($M) | $771 | $299 | Up 158% |
| Diluted earnings per share | $0.47 | $0.18 | Up 161% |
In a statement, Lisa Su, AMD’s chair and chief executive, branded it a strong third quarter with record revenue led by higher sales of EPYC and Instinct data center products, and robust demand for our Ryzen PC processors.
“Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute,” she wrote.
The company also revealed record Data Center segment revenue of $3.5 billion, which was up 122% year-over-year, primarily driven by the strong ramp of AMD Instinct™ GPU shipments and growth in AMD EPYC™ CPU sales.
Elsewhere, client segment revenue was $1.9 billion, up 29% year-over-year, and 26% sequentially, mainly due to strong demand for Zen 5 AMD Ryzen™ processors.
However, gaming segment revenue was down 69% year-over-year to $462 million, primarily due to a decrease in semi-custom revenue.
Embedded segment revenue was also down to $927 million. This represented a 25% year-over-year decrease as customers “normalized their inventory levels.”
Fast-track AI Solutions
Earlier this year, it was announced that Thomas Zacharia was joining AMD as senior vice president of strategic technology partnerships and public policy.
AMD said he would lead the global expansion of the business and help “fast-track the deployment” of customized AMD-powered AI solutions.
In a statement, Lisa Su said:
“Thomas is a distinguished leader with decades of experience successfully creating public/private partnerships that have resulted in consistently deploying the world’s most powerful and advanced computing solutions, including the world’s fastest supercomputer Frontier.”
AMD Stock Forecast: Analyst Views
Let’s take a look at the AMD stock predictions of analysts.
Danni Hewson, head of financial analysis at AJ Bell, told Techopedia that AMD was playing catch-up to Nvidia (NVDA) and the race is expensive.
“Investors have clearly made their choice with AMD’s shares down 5% and Nvidia up a whopping 185% since the start of the year,” she said.
Hewson suggested there was a question mark over whether Nvidia can keep wowing or whether expectations are already too high.
“By contrast, AMD has been putting all the right parts in all the right places ready to start assembling the new version of its AI chip, and it’s keeping a close eye on costs with plans to cut 4% of its workforce,” she said. “AMD initially benefited from the AI hype, but investors want results, and they want them yesterday.”
Competition With Nvidia
Derren Nathan, head of equity research at Hargreaves Lansdown, believes there are two things to consider with AMD: the outlook and the valuation.
Nathan told Techopedia:
“The outlook is brightening. Data Center sales have been motoring for a while, but encouragingly we’ve also seen the Client segment turn the corner, with AI reigniting an upgrade cycle for user devices as well. Going into the final quarter it’s expecting revenue growth in the low 20s, so hardly a slouch.”
Nathan pointed out that it was also the only player giving Nvidia a run for its money within accelerated computing, which is also essential for AI. However, this comes with issues.
“It’s sprinting fast to keep up and has much shallower pockets, which means it’s unlikely to excite as much in terms of payouts to shareholders,” he explained. “It’s also unlikely to make a dent in its rival’s dominant market share any time soon.”
Nathan believes that Nvidia shares are trading at a premium for good reason.
“It’s creating an entire ecosystem on what might be shaping up to be the next industrial revolution. For those old enough to remember the arrival of video cassettes, Nvidia is very much the VHS,” he said.
“AMD is enjoying the same tailwinds for now, but if its rival to Nvidia’s Blackwell, the less memorably named MI325x, proves to be the equivalent of Betamax, it may well face the same path to obscurity.”
Will AMD ‘Take a Piece of the AI GPU Pie’?
Brian Colello, a strategist at Morningstar, has a fair view AMD’s price target of $160 on the stock. He suggested a reason for the share price fall after solid third-quarter results.
In his AMD stock outlook of November 18, 2024, he wrote:
“We suspect investors were looking for more out of AMD’s artificial intelligence business, however, and the shares fell after hours,” he pointed out.
However, he insisted he was encouraged by the company’s progress in CPUs and is a “bit more bullish” about its longer-term AI opportunities.
Colello also pointed out that bulls will point to AMD having gained market share in the PC CPU arena, as well as its partnership with TSMC, the leading chip manufacturer.
However, he acknowledged that bears will argue that Intel (INTC) remains the industry leader in PC CPUs, while AMD will need to improve software capabilities to challenge Nvidia’s AI dominance.
“The company again anticipates tremendous data center product growth and healthy client revenue growth, while also seeing modest sequential growth in gaming and embedded chips,” he added. “Adjusted gross margin is expected to tick up to 54%.”
Latest AMD Stock Predictions for 2024, 2025 & 2030
So, is AMD a buy, hold, or sell?
AMD stock is viewed as a ‘moderate buy,’ according to the views of 32 Wall Street analysts compiled by MarketBeat as of November 19, 2024.
Twenty nine have ‘buy’ recommendations in place, while three see it as a ‘hold’.
- Their consensus view is that AMD’s future stock price could rise 38.77% to $192.79 over the coming year.
- The most optimistic analysts have an AMD price target of $250, while the lowest forecast still has it rising to $145.
The following table shows the 10 latest analysts’ AMD stock predictions.
| Date | Analyst Firm | Action | Rating Change | Price Target | Percentage Change |
|---|---|---|---|---|---|
| 10/31/2024 | Benchmark | Reiterated Rating | Buy ➝ Buy | $200.00 ➝ $200.00 | +34.59% |
| 10/30/2024 | Citigroup | Lower Target | Buy ➝ Buy | $210.00 ➝ $200.00 | +33.64% |
| 10/30/2024 | Cantor Fitzgerald | Reiterated Rating | Overweight ➝ Overweight | $180.00 ➝ $180.00 | +20.18% |
| 10/30/2024 | Piper Sandler | Reiterated Rating | Overweight ➝ Overweight | $200.00 ➝ $180.00 | +19.68% |
| 10/30/2024 | UBS Group | Lower Target | Buy ➝ Buy | $210.00 ➝ $205.00 | +35.75% |
| 10/30/2024 | Evercore ISI | Boost Target | Outperform ➝ Outperform | $193.00 ➝ $198.00 | +31.12% |
| 10/30/2024 | Barclays | Lower Target | Overweight ➝ Overweight | $180.00 ➝ $170.00 | +12.58% |
| 10/30/2024 | Morgan Stanley | Lower Target | Equal Weight ➝ Equal Weight | $178.00 ➝ $169.00 | +1.65% |
| 10/30/2024 | TD Cowen | Lower Target | Buy ➝ Buy | $210.00 ➝ $185.00 | +11.28% |
Meanwhile, TipRanks has the stock down as a ‘strong buy,’ according to its AMD share price forecast of 33 analysts. Twenty six see it as a ‘buy,’ while seven have ‘hold’ recommendations in place.
Their consensus view is that the AMD stock price could enjoy a 34.63% uplift to $187.04 over the coming year, although opinions ranged from $150 to $220.
How about an AMD stock long-term forecast? What are the AMD stock projections for the next few years?
Well, WalletInvestor’s algorithmic forecast has the stock rising 11.5% to $154.99 over the next 12 months. However, according to its 5-year AMD stock forecast, the stock may reach $235.83 by November 2029.
As far as an AMD stock forecast for 2030 is concerned, Coincodex has the stock reaching $161.06 if it maintains its current 10-year average growth rate.
Note that analysts’ and algorithm-based projections might prove to be wrong.
AMD Profile
To round up our AMD stock forecast, we look at the company’s history.
It was founded back in 1969 as a Silicon Valley start-up focused on leading-edge semiconductor products.
Since then, it has grown into a global giant. It is currently the world’s fifth-largest electronics company, with a market capitalization of $223.96 billion.
AMD makes processors that are used in everything from supercomputers and game consoles to always-on cloud infrastructures and laptops.
The Bottom Line: Should I Invest in AMD Stock?
The latest AMD stock forecasts can help you get a broader picture of the stock’s performance, but whether you should invest depends on your view of the company’s prospects.
The company has delivered strong third-quarter results, but its share price has suffered as analysts were expecting even more from the announcement.
However, the consensus AMD stock prediction 2025 of Wall Street analysts as of November 19, 2024, remains positive.
However, analysts can be wrong. You’ll need to conduct your own research to decide whether AMD is an attractive holding.
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References
- AMD – 41 Year Stock Price History | AMD (MacroTrends)
- AMD Accelerates Exascale Computing to New Heights Powering the Fastest Supercomputer Ever, El Capitan :: Advanced Micro Devices, Inc. (AMD) (AMD)
- AMD on X (X)
- AMD Reports Third Quarter 2024 Financial Results :: Advanced Micro Devices, Inc. (AMD) (AMD)
- AMD Hires Thomas Zacharia to Expand Strategic AI Relationships :: Advanced Micro Devices, Inc. (AMD) (AMD)
- Advanced Micro Devices (AMD) Stock Forecast and Price Target 2024 (Marketbeat)
- Advanced Micro Devices (AMD) Stock Forecast, Price Targets and Analysts Predictions (TipRanks)
- Advanced Micro Devices Stock Forecast: up to 154.997 USD! – AMD Stock Price Prediction, Long-Term & Short-Term Share Revenue Prognosis with Smart Technical Analysis (WalletInvestor)
- Advanced Micro Devices (AMD) Stock Forecast & Price Prediction 2025, 2030 (CoinCodex)
- About AMD (AMD)
- Largest electronics companies by market cap (CompaniesMarketCap)
- The AMD Brand (AMD)
