What happened
Shares of Advanced Micro Devices (AMD +2.15%) climbed on Tuesday, following positive analyst commentary. As of 3:15 p.m. ET, AMD's stock price was up 4.2% after rising as much as 7.7% earlier in the day.
So what
UBS analyst Timothy Arcuri placed a buy rating on AMD's stock on Tuesday. He sees the semiconductor leader's share price rising roughly 25% to $95.
After a sharp downturn in the personal computer (PC) market in 2022, Arcuri believes sales of central processing units (CPUs) are poised for a rebound in 2023. In turn, Arcuri thinks AMD and other computer hardware makers are poised to outperform the stock market averages as the PC industry recovers.
NASDAQ: AMD
Key Data Points
Baird analyst Tristan Gerra is also bullish on AMD's prospects. He boosted his share price forecast for the chipmaker from $65 to $100 on Tuesday.
Gerra's talks with customers suggest AMD is enjoying robust sales of its new Genoa chip from data center equipment makers. The high-performance chip could help AMD take market share from rival Intel, according to Gerra. Combined with Genoa's higher gross margins, these data center sales could provide a powerful boost to AMD's profits.
Now what
News of Berkshire Hathaway's new equity stake in Taiwan Semiconductor Manufacturing also appeared to give investors a more optimistic view of the chip industry. The Warren Buffett-led conglomerate purchased more than $4 billion worth of the chip manufacturer's stock.
Taiwan Semiconductor is a key supplier for AMD, so investors may also be viewing Buffett's purchase as an indirect vote of confidence for AMD's and other chip designers' long-term prospects.
