No Rest for AMD Stock as It Moves on AI Plans and Factory Sale
There’s no rest for the wicked or for chipmakers chasing Nvidia (NVDA) in the AI race. Advanced Micro Devices (AMD) is by no means wicked, but it certainly doesn’t find any rest in its pursuit to catch the chipmaking king. And then there’s the ‘tariff’ thing, which forces everyone to reevaluate their strategies. Just when Wall Street thought tariffs might slam the brakes on the chip industry, President Trump hit pause. His 90-day tariff relief window and reduction to a 10% rate gave tech investors a reason to breathe and AMD a chance to bounce.
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The stock soared nearly 24% last Wednesday, its best run in almost a decade. Then came the correction, and by the end of the tumultuous two weeks starting on April 2, AMD lost roughly 8% of its value, but it has been up 2.52% in the past five days.
AMD Aims for Full-Stack Solutions
However, this isn’t just about tariff drama and price swings. AMD has been hustling behind the scenes, and things are getting interesting. The company recently closed a $4.9 billion acquisition of ZT Systems, aiming to sharpen its edge in the AI infrastructure game. With demand for high-powered servers booming, AMD is hungry for more than just chips – it wants to offer full-stack solutions, combining its CPUs, GPUs, and software platform ROCm, an open-source rival to Nvidia’s CUDA.
AMD is not trying to become Nvidia 2.0. Instead, it’s ditching the factory gloves and sticking to what it knows best – designing cutting-edge hardware. The company is now preparing to sell off ZT Systems’ U.S.-based server assembly plants, which it inherited. Yes, it’s like buying a fancy toolbox and immediately selling the tools you don’t need. AMD wants the brains of the operation, not the brawn.
According to reports, companies like Compal Electronics, Wiwynn Corp., and U.S.-based Jabil Inc. (JBL) are lining up with bids. AMD expects to wrap up the sale, potentially worth $3 to $4 billion, by the end of Q2. With 1,500 skilled workers and facilities in Texas and New Jersey on the table, it’s a hot asset, especially as U.S.-based manufacturing becomes a geopolitical must-have.
Meanwhile, AMD continues to showcase its AI capabilities. The Instinct MI325X accelerator, launched in Q4 2024, features an impressive 288GB of HBM3E memory. The MI350 series, powered by the new CDNA 4 architecture, is expected in 2025. This isn’t merely about remarkable specifications. It’s a strategy to compete with Nvidia and capture a share of the trillion-dollar AI market.
Cautious Stance from Analysts
Still, Wall Street analysts are playing the cautious waiting game. Citi analyst Christopher Danely, a 4-star analyst according to TipRanks’ ratings, maintained a Hold rating this week. Danely joined KeyBanc’s John Vinh, who issued a Hold a few days earlier. Not everyone is sitting on the fence, though, as TD Cowen reiterated its Buy rating just a day later.
Here we are: a chipmaker closing factories while heavily investing in AI, navigating complex trade dynamics, and attracting scrutiny from analysts. This is a chaotic yet ambitious and intriguing phase in AMD’s journey, and the journey is still far from over.
Is AMD Stock a Buy, Hold, or a Sell?
According to Wall Street analysts, Advanced Micro Devices is a Moderate Buy, with an average price target of $144.77, implying a 53.20% upside potential.
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