What happened
Shares of chipmaker Advanced Micro Devices (AMD -0.35%) were climbing today after an analyst initiated coverage of the company and put a buy rating on its stock yesterday.
The semiconductor stock jumped by 4.8% today and was up by 2.8% as of 2:02 p.m. ET.
So what
Stifel analyst Ruben Roy started coverage of AMD yesterday and put a buy rating on the stock with a $122 price target. Part of the analyst's optimism for the company comes from AMD's product lineup, with Roy noting that the company has a "strong product roadmap."
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"We expect AMD's current momentum in data center, enterprise and with tier-1 PC OEMs to continue as the company remains on a rapid cadence of new product introductions," Roy said in an investor note.
And while there could be some short-term volatility in chip demand, Roy expects the company's gross and operating margins to continue expanding.
Investors were also pleased to see that Roy believes AMD's current valuation "appears reasonable."
Now what
AMD's stock, like most other tech stocks, has been volatile this year. The semiconductor company's share price is down 42% year to date, and has fallen 17% just this month.
While Roy's optimism for AMD's stock could prove true, long-term investors will likely have to stomach some more volatility in the short term as tech stocks continue to be shunned by many investors right now.
Investors continue to be concerned about high inflation, a potentially slowing U.S. economy, and supply chain issues -- all of which could continue to weigh on AMD in the near term.
