Advanced Micro Devices (NASDAQ:AMD) didn’t exactly steal the spotlight at this month’s Consumer Electronics Show. Instead, the company’s stock fell to 52-week lows in the aftermath. This isn’t a new trend – while its industry peers have been riding a wave of AI-driven growth, AMD has struggled to keep pace, with its shares sliding more than 23% over the past year.
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Though AMD can point to growing revenues and improving margins, especially in the lucrative data center segment, it also has the seeming misfortune of competing against Nvidia, one of the largest and most celebrated companies in the world. Nvidia’s dominance in AI has left little room for AMD to carve out a significant foothold, despite its efforts to innovate and diversify its offerings. Moreover, AMD’s relatively slower product rollout cycle and limited AI-specific capabilities have exacerbated its struggles to keep up with Nvidia’s aggressive pace.
Yet, despite lurking in Nvidia’s industry-dominating shadow, one investor, known by the pseudonym On the Pulse, is not buying the market’s pessimism regarding AMD.
“AMD’s new AI accelerators in 2025 could boost sales, profit growth, and gross margins making it a compelling investment,” asserts the 5-star investor.
On the Pulse explains that the combination of skyrocketing demand and limited GPU supply is exactly what AMD needs. The investor is particularly optimistic about the launch of the MI325X Instinct AI accelerator, the company’s latest data center chip.
With Nvidia’s Blackwell product sold out through the end of the year, On the Pulse suggests that MI325X could be particularly well-situated to help AMD enjoy both improved revenues and margins especially.
“With sales momentum shifting in favor of Advanced Micro Devices in the last quarter, as far as data centers are concerned, I would bet that AMD also has more potential to up-scale its gross margins than Nvidia in 2025,” predicts the investor.
Slipping share prices have made AMD quite the bargain, adds On the Pulse, who calls the company the “steal of the year.” To this end, the investor assigns AMD a Strong Buy rating. (To watch On the Pulse’s track record, click here)
Wall Street analysts share a similar enthusiasm. Of the 32 analysts covering AMD, 21 rate it a Buy, 10 a Hold, and 1 a Sell, culminating in a Moderate Buy consensus. Moreover, the stock’s 12-month average price target of $172.24 implies an upside of over 40%. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
