Why AMD Stock Rocked the Market Today
What happened
Wednesday was a good day to be an Advanced Micro Devices (NASDAQ: AMD) shareholder. The veteran chipmaker's stock rose by more than 2% against the S&P 500 index's sub-0.5% advance. Investors were encouraged by a price target hike from an analyst at a prominent bank.
So what
Bank of America analyst Vivek Arya has gotten more bullish on AMD stock. He now expects it to reach $105 per share in the next 12 months, up from his preceding target of $95 per share. He left his neutral recommendation on the shares intact, however. AMD stock closed Wednesday's trading session at $97.02.
Although it wasn't immediately known why Arya boosted his price target, his view on the tech stock is a bit out of the mainstream. According to a recent article on his move in Investing.com, AMD is tagged with 29 buy recommendations and only 13 neutral/holds. No analysts have sell recommendations on the stock.
AMD has been having an eventful May. At the start of the month, it unveiled its first-quarter report, which generally disappointed the market due to management's lackluster guidance. However, the current mania for anything connected to artificial intelligence (AI) is boosting sentiment for makers of the hardware that will power AI systems -- chipmakers like AMD included.
Now what
The promise of AI is enticing, but we should bear in mind that AMD is generally struggling these days. Inflation and macroeconomic concerns have driven many tech buyers to rein in their spending, and that trend continues to affect the performance of component manufacturers.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Bank of America. The Motley Fool has a disclosure policy.
