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Why AMD Stock Popped Today

By Joe Tenebruso - Jun 30, 2021 at 5:34PM

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Analysts see handsome gains ahead for investors.

What happened 

Shares of Advanced Micro Devices (AMD 0.18%) rose 4.9% on Wednesday, following positive analyst commentary.  

So what

On Tuesday, Wells Fargo analyst Aaron Rakers reiterated his overweight rating on the chipmaker's stock. He argued that rival Intel's (INTC 0.64%) production delays for its most advanced chips are an opportunity for AMD to continue to gain share in the massive server market.

A digital bull is climbing a rising stock chart.

Wall Street is growing more bullish on Advanced Micro Devices' stock. Image source: Getty Images.

Today, Bank of America analyst Vivek Arya also repeated his buy rating on AMD's shares. Arya believes the bears are overstating the competitive risks posed by rival chipmakers. Moreover, with AMD underperforming both the S&P 500 and the PHLX Semiconductor Sector Index so far in 2021, he posits that its stock price has "catch-up potential" in the year ahead.

Now what 

Intel's struggles have been a boon for AMD. Share gains in the server CPU market have helped to drive AMD's sales and profits sharply higher. Its revenue and net income soared 93% and 243%, respectively, to $3.4 billion and $555 million, in the first quarter of 2021. 

Intel's manufacturing delays could allow AMD to take even more market share in this important segment. If they do, the chipmaker's financial results will likely continue to impress investors in the coming quarters.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Advanced Micro Devices and Intel and recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
$101.01 (0.18%) $0.18
Intel Corporation Stock Quote
Intel Corporation
$36.34 (0.64%) $0.23

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