Advanced Micro Devices (NASDAQ:AMD) stock dropped over 8% on April 4. While there was no company-specific news, the decline in AMD stock could be attributed to the broader market selloff.
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It’s important to highlight that AMD stock hit a 52-week high of $227.30 on March 8. However, it has dropped by about 27% since then. According to Envision Research, aka Lucas Ma, AMD’s significant increase in value limits the upside potential in the near term. Besides concerns around valuation, Ma sees growing competitive headwinds from chip giant Nvidia (NASDAQ:NVDA). Notably, Nvidia plans to attractively price its latest AI chips to appeal to a broad range of users.
Another Development: An Unsolicited Mini-Tender Offer
On April 1, AMD urged its shareholders to reject Tutanota LLC’s mini-tender offer. Tutanota plans to acquire 150,000 shares of the semiconductor company for $200 per share. The offered price is subject to certain conditions, including the requirement that AMD’s closing price should surpass $200 on the final trading day before the offer concludes, which is April 19, 2024.
Is AMD a Buy, Hold, or Sell?
AMD stock has risen significantly in value, and Envision Research has raised concerns. However, Wall Street analysts are bullish about its prospects. The company’s MI300 accelerator is witnessing solid enterprise demand. Further, it will likely benefit from the recovery in the traditional server CPU market.
The stock has 28 Buy and six Hold recommendations for a Strong Buy consensus rating. Analysts’ average price target on AMD stock is 201.26, implying 21.37% upside potential. Notably, AMD stock has risen over 79% in one year, fuelled by investors’ enthusiasm for artificial Intelligence (AI) technology.
