AMD Rallies After Raymond James Upgrade to Strong Buy

Advanced Micro Devices climbed in Tuesday trading, changing hands at $477 in the early afternoon, up about 4% from Monday’s close of $456.75. The move followed an analyst upgrade. It came one day after the same chip stocks had been sold down ahead of Nvidia’s quarterly report.

Raymond James lifts its rating and target

Raymond James raised its rating on AMD to Strong Buy from Outperform before Tuesday’s open and lifted its price target to $641 from $565. The firm framed AMD as its best mix of direct earnings leverage, data-center positioning and market-share gains among the chipmakers it covers. Its argument centers on server processors. Raymond James projects demand for AI-linked server CPUs growing at a 44% annual rate and reaching roughly $201 billion by 2030, and it sees AMD taking a widening share of that market from rivals. The firm’s logic draws a line between the accelerators that do the heavy AI computation and the processors that increasingly manage them, a coordinating job it expects to grow more valuable. The new target sits above AMD’s own 52-week high, a level the shares have yet to reach.

The call landed on a company whose data-center business is already expanding fast. AMD’s data-center revenue more than doubled from a year earlier in its most recent quarter, up 107%, carried by demand for the chips that run artificial-intelligence workloads. That segment has become the center of the investment case for the stock.

A bounce after an August slide

AMD spent August going the other way. The shares traded at $514 as recently as August 14 and slipped to $456.75 by Monday, an 11% retreat over that stretch, before Tuesday’s turn higher. They had topped out just under $581 at the end of June. Even after the bounce, the stock sits about 18% below its 52-week high of $584.73.

Zoom out and the picture changes. AMD has risen 71% over the past three months, one of the larger runs among big-cap chip names, helped by surging demand for its data-center chips. The August pullback trimmed some of that gain without erasing it.

Tuesday’s advance did not happen in isolation. AMD itself had fallen 3.49% on Monday as investors trimmed positions across the group before Nvidia’s results, and much of the sector moved the same way. On Tuesday that trade reversed. Chip stocks broadly recovered, Intel rose as well, and the rebound tracked a steadier tone in technology shares as the market waited on both the Nvidia report and fresh inflation data due later in the week.

Nvidia’s number is the next test

The near-term catalyst for AMD is not its own calendar but a competitor’s. Nvidia is scheduled to post quarterly results on Wednesday, August 26, after the close, and a report of that size tends to move the whole semiconductor group in either direction. AMD delivered its own latest quarter earlier this month, so it has no fresh release of its own on the immediate horizon.

For now, the gain rests on one firm’s revised view, delivered a day before the sector’s largest name reports. Traders will be watching Wednesday’s number.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.