The stock market has been searching for signs of stability lately, and on Tuesday, major market benchmarks once again demonstrated their resilience. Taking a more positive view of the ability of the biggest companies in the world to overcome the challenges they face, market participants bid stock prices higher. As of 1:45 p.m. ET, the Nasdaq Composite (^IXIC 0.67%) was up by more than 2%.
Key votes of confidence helped lift shares of a couple of standout stocks. Both Paramount Global (PARA -2.40%) and Advanced Micro Devices (AMD 0.44%) rose on Tuesday, and below, we'll look at the factors that prompted those upward moves.
Paramount gets the Buffett seal of approval
Paramount Global stock climbed by close to 14% on Tuesday afternoon. The media giant was among the stocks that Warren Buffett's Berkshire Hathaway (BRK.A -0.66%) (BRK.B -0.63%) added to its portfolio during the first quarter.
Paramount was also among the largest purchases that Berkshire Hathaway made during the quarter. The latest disclosure report filed with the U.S. Securities and Exchange Commission found that the conglomerate bought nearly 69 million shares of Paramount stock, establishing a position equal to about 11% of shares outstanding.
Like many of Buffett's favorite investments, Paramount shares boast an extremely attractive valuation currently. Even as analysts expect that Paramount's earnings will be lower in 2022 than they were in 2021, the stock trades at just about 12 times its trailing net income. Moreover, some expect that despite the rising competition in streaming services, Paramount's ability to keep generating appealing new content should give it an edge over some other streaming companies.
Paramount shareholders have been stuck in a lull for a long time. Now, though, there's greater reason to believe that the worst of times for the media company might finally be behind it.
AMD looks chippy
Meanwhile, AMD shares were up nearly 8.5% Tuesday afternoon. The semiconductor maker earned favorable comments from prominent stock analysts, raising shareholder sentiment about the company's prospects.
Analysts at Piper Sandler boosted their rating on AMD stock from neutral to overweight, and gave a big boost to their target price on it, raising it from $98 per share to $140 per share. Previously, Piper Sandler had expected that a more sluggish market for PCs as the effects of the pandemic began to slow would weigh on AMD, but the analysts admitted that the chipmaker's long-term prospects still look strong. Moreover, with its acquisition of Xilinx now complete, AMD has even more avenues for growth.
Indeed, the move fits with good news from AMD recently. The chipmaker's first-quarter financial results released in early May included substantial organic sales gains that got an additional boost from the Xilinx acquisition. In particular, cloud computing demand helped drive enterprise sales higher, and the company increased its guidance for the remainder of the year.
Many investors figured that strength in semiconductors might have gotten artificially inflated during the early part of the pandemic. However, demand has remained strong, and that's helping to keep AMD's business looking good.