12 AI Stocks on Analysts’ Radar

6. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 96

Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications. Bank of America Securities analyst Vivek Arya recently maintained a “Buy” rating on the stock and set a price target of $130.00. The firm believes that AMD holds strong potential for growth and profitability, and at the heart of this conviction lies the company’s impressive earnings potential.

The firm believes that AMD’s expected Earnings per Share (EPS) will significantly outpace Wall Street expectations for the coming years. The reason behind the optimism stands to be its continued market share gains in the CPU sector for both servers and PCs, along with the company’s strategic positioning in the rising AI market. This includes significant contracts in the Middle East and an encouraging pipeline of AI-related products.

Arya’s confidence also extends to AMD’s valuation, which is considered attractive due to its consistent management execution and capability to grow its topline and EPS at impressive rates. Moreover, while some big US active fund managers aren’t enthusiastic about AMD, its potential to capture a meaningful share of the AI accelerator market is a significant opportunity. The company has also recently expanded its stock buyback program further, boosting its long-term outlook. At the same time, Arya has noted challenges for the stock, such as geopolitical uncertainties, competitive pressures from larger AI players, and a possible Intel comeback under the new management.