Why AMD Stock Is Rising Today
AMD's share price is rising today thanks to bullish momentum for the broader market and positive analyst coverage.
Melius raised its rating on AMD stock from hold to buy and increased its one-year price target from $110 per share to $175 per share.
AMD could benefit from growing demand for processors used for AI inference applications.
10 stocks we like better than Advanced Micro Devices ›
Advanced Micro Devices (NASDAQ: AMD) stock has moved higher in Monday's trading despite giving up some of its early gains. The company's share price was up 1.1% as of 3:15 p.m. ET. At the same point in the day's trading, the S&P 500 and the Nasdaq Composite were both up 0.7%.
In addition to positive momentum for the broader market, AMD stock is getting a lift from bullish analyst coverage. The company's share price is now up 22% over the last three months.
Melius published new coverage on AMD stock before the market opened today and upgraded its rating on the stock from hold to buy. The investment firm also increased its one-year price target on the stock from $110 per share to $175 per share.
Melius believes that AMD's outlook in the artificial intelligence (AI) has improved significantly since its last write-up on the stock. The firm sees the tech hardware specialist benefiting from demand for graphics processing units (GPUs) used to run AI inferencing applications. Melius thinks investors are about to get more excited about AMD's GPU sales outlook from 2026 through 2028 and thinks that the MI400 processor the company is set to launch next year is poised to be a winner.
Investors have been becoming more bullish about AMD's position in the AI space lately, and the Advancing AI conference hosted by the company earlier this month has helped strengthen confidence in the company's roadmap. The company's recently launched MI350 processor seems to be off to a strong start, and the launch of the MI400 chip next year could further strengthen its competitive positioning. While AMD appears unlikely to topple Nvidia in the high-end GPU market that currently centers heavily around AI training, it's looking increasingly likely that it will be able to score some wins in the space and also record strong results when it comes to less demanding processors used for AI inference applications.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
Why AMD Stock Is Rising Today was originally published by The Motley Fool
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