Getting analysts on your side is generally a way to see your stock price climb. But that didn’t help things much for Advanced Micro Devices (NASDAQ:AMD), whose stock slipped nearly 3% in Thursday afternoon’s trading. Two different analyst firms—RothMKM and Wells Fargo—praised AMD and hiked their price targets on the chipmaker.
Starting with RothMKM analyst Sujeeva De Silva. De Silva noted that the acquisition of Silo AI, along with other acquisitions in that vein, should help AMD gain on its various competitors in the field. De Silva left a Buy rating in place and hiked the price target from $180 to $200.
Also on AMD’s side was Aaron Rakers at Wells Fargo. Rakers had high praise for the Silo AI deal, calling it a “…positive tactical/strategic move focused on deepening AMD’s internal open-source AI software expertise…” Rakers kept his Overweight rating in place while hiking his price target from $190 per share to $205.
It’s worth noting that both De Silva and Rakers are five-star analysts with impressive track records.
So Then, Why Are Investors Departing?
This should be good news for AMD. But share prices are in decline. Are we looking at profit taking from yesterday’s announcement? Or is something else in play? We know that AMD was considered an “AI laggard” until just recently by Melius Research, who looked for AMD to turn it around in the second half. The move to buy Silo AI may well be the catalyst of that recovery.
However, there’s some bad news; forget about seeing new AMD graphics cards for the rest of this year, particularly in time for Christmas. Reports note that the next round of RDNA 4 graphics cards won’t hit until 2025 at the earliest. Worse, the budget option, with the Navi 44 GPU, won’t show up until the second quarter of 2025, giving competitors a lot of space to themselves.
Is AMD a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMD stock based on 28 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 56% rally in its share price over the past year, the average AMD price target of $191.57 per share implies 6.72% upside potential.
