What happened
Shares of Advanced Micro Devices (AMD -5.44%) 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.
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.
