AMD Should I Buy
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Advanced Micro Devices Inc (AMD) is a good buy for a beginner investor with a long-term horizon and $50,000-$100,000 available for investment. The company's strong financial performance, positive growth outlook, and analyst support outweigh the short-term price weakness. The stock is undervalued with a PEG ratio of 0.65 and has significant potential in the AI and data center markets, making it a solid long-term investment.
The MACD is below zero and negatively contracting, indicating bearish momentum. RSI is at 34.841, close to oversold territory but still neutral. The stock is trading near its support level of 196.644, with resistance at 220.301. The moving averages are converging, suggesting consolidation. Overall, the technical indicators show short-term weakness but potential for a rebound.
AMD's data center revenue grew 39% YoY in Q4 2025, showing recovery potential.
Analysts forecast 34% revenue growth in 2026 and 37% in 2027, aligning with a 35% CAGR expectation.
The Trump administration's allowance of exports to China is expected to boost revenue in 2026 and beyond.
AMD is positioned to capitalize on AI infrastructure trends, with its addressable market in data centers projected to grow to $1 trillion by
Analysts maintain strong Buy ratings with price targets as high as $345, reflecting confidence in long-term growth.
Post-Q4 earnings, the stock fell 17%, reflecting short-term market concerns.
Higher-than-expected operating expenses impacted profitability.
Some analysts express caution about AMD's MI455 and rack-scale products, labeling them as 'show-me' stories.
In Q4 2025, AMD's revenue increased by 34.11% YoY to $10.27 billion. Net income surged 213.49% YoY to $1.51 billion, and EPS rose 217.24% YoY to $0.92. Gross margin improved by 10.89% YoY to 51.41%. These figures highlight strong growth and operational efficiency.
Analysts are overwhelmingly positive on AMD, with multiple firms maintaining Buy ratings and raising price targets. Notable targets include $345 (Wells Fargo), $330 (UBS), and $310 (UBS). Analysts cite AMD's strong position in AI and data center markets, as well as its potential for significant EPS growth in the coming years.
