Advanced Micro Devices Inc. (NASDAQ: AMD), despite its market-beating financial performance for the fourth quarter of its fiscal year, took a hit after-hours Tuesday.
Investors have reacted primarily to the 69% increase in sales of data centres, which grew to $3.86bn from $4.14bn as analysts had predicted.
Hans Mosesmann, Rosenblatt analyst, says that the weakness of AMD stock after earnings may have created a great opportunity for investors who are interested in holding this AI name long-term.
AMD stock remains competitive vs Nvidia
AMD shares are a good investment after the company’s top and bottom lines are expected to grow by “strong double-digit percentage” this year.
Hans Mosesmann is bullish about the semiconductor giant, despite the narrative that Advanced Micro Devices has lost momentum.
In a recent report he argued that “AMD’s roadmap is competitive, if it is not incrementally more so compared to Nvidia Blackwell.” He added that “ROCm compiler and the continued chiplet advantage help offset the CUDA Nvidia monopoly.”
Jim Cramer, the host of Mad Money and a famous investor, is also a bullish AMD stock. He believes that the chipmaker could be the only one to catch up with Nvidia.
Shares of Advanced Micro Devices have fallen by about 18% from their highs for the year.
AMD does not lose market share to custom ASICs
In his research note the Rosenblatt analyst also dismissed concerns that custom ASICs were stealing market share from GPUs.
“Nobody will switch business from AMD and Nvidia to a custom-designed DC solution this year,” he told his clients, adding that the custom ASICs do not have a significant edge.
Hans Mosesmann is bullish about AMD stock, mainly because he has great confidence in Lisa Su’s leadership and the sentiment towards AMD has become a little too negative.
Note that Advanced Micro Devices’ shares are now down by an alarming 50 percent compared to their high in March 2024.
How high can AMD shares soar in 2025
Mosesmann has predicted that AMD stock will rise to $250.
His price target suggests a potential gain of 135% from current levels. According to the Rosenblatt research note:
AMD will have a double-digit DC GPU-accelerated/AI compute unit market share in the next few years and a TAM (total annualized value) of $500 billion. This is about half of GPU gaming share, which was 30%, for the previous generation.
Advanced Micro Devices’ fourth quarter fiscal earnings were $1.09 per share (adjusted), on revenue of $7.66 billion. Analysts were expecting $1.08 a share and $7.66 Billion in revenue, respectively.
AMD shares are not attractive to income investors because they do no pay a written dividend.
This post AMD’s earnings decline is unfair: Here’s why analysts remain strongly bullish first appeared on The ICD
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