‘Play It Like Warren Buffett,’ Says Investor About AMD Stock
For Advanced Micro Devices (NASDAQ:AMD) stock, 2025 has picked up right where 2024 left off – with continued losses. After ending 2024 in a massive slump, the AI chipmaker is down 14% this year.
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A mix of market volatility, escalating trade tensions, tighter chip export restrictions to China, and concerns over DeepSeek-driven cutbacks in AI spending have weighed heavily on investor sentiment. To make matters worse, AMD’s lackluster Q1 2025 guidance has only deepened the gloom surrounding its stock.
Still, the company delivered record revenues of $7.66 billion in Q4 2024, which beat estimates by over $132 million. The crucial data center segment continues to grow by leaps and bounds, and was up almost 70% year-over-year.
So, could now be the time to jump on board the AMD express?
One investor, known by the pseudonym Juxtaposed Ideas, believes a turnaround is only a matter time, and counsels patience in the mold of the venerated Oracle from Omaha.
“We abide by Warren Buffett’s quote, in which ‘the stock market is a mechanism for transferring wealth from the impatient to the patient,’” explains the 5-star investor.
Juxtaposed points to a number of factors that support this bullish view, including AMD’s increasing x86 market share and the pulled forward sales of its MI350 AI accelerator. In fact, the investor notes that the bitter period since AMD’s previous peak could serve as a prelude for some healthy gains to come.
“AMD is likely to outperform once a floor materializes and mid-2025 brings forth improved data center monetization,” notes the investor.
In fact, the trough has brought the company’s share prices into some deep value territory, with excellent margins of safety, according to the investor. Juxtaposed notes that AMD’s forward Price-to-Earnings (P/E) ratio of 22.73x is cheaper than those of NVDA (26.67x), AVGO (29.85x), and MRVL (25.58x), making shares a bargain at current prices.
Looking at AMD’s potential through 2026, the investor believes that, in a best-case scenario, shares could more than double in value.
“With AMD, we believe investors simply need to wait out the tough H1 ’25 period. Patience may be more prudent in the meantime,” concludes Juxtaposed Ideas, who rates AMD shares a Buy. (To watch Juxtaposed Ideas’ track record, click here)
By and large, Wall Street seems willing to be patient with AMD as well. With 25 Buys, 11 Holds, and 1 Sell, AMD holds a Moderate Buy consensus. Its 12-month average price target of $147.81 suggests potential gains just shy of 43% in the year ahead. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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