Advanced Micro Devices remains one of the most compelling opportunities in the semiconductor space, well-positioned to capitalize on the ongoing AI revolution, accelerating data center demand, and robust growth in high-performance computing. Despite recent stock weakness, AMD’s strategic positioning in emerging technologies, particularly its MI300 artificial intelligence accelerator s and EPYC server processors , gives the company an edge in capturing market share from competitors. AMD”s long-term growth potential is underpinned by its ability to innovate and deliver best-in-class products across gaming, data centers and AI. As the demand for AI chips intensifies, AMD’s competitive positioning against dominant players like Nvidia and Intel places it in a prime spot for leadership. While near-term market volatility has kept the stock under pressure, this pullback offers an attractive entry point for investors with a forward-looking view of AMD’s growth trajectory. The stock is off more than 8% in December alone. AMD YTD mountain AMD shares in 2024 If we examine the chart below, AMD has recently entered oversold conditions on both daily and weekly timeframes, signaling exhaustion from sellers. The stock has found support around the $120 to $125 range, a level that has historically acted as a price for buyers to step in. Momentum has started to turn upward from oversold levels, suggesting a potential reversal in trend. If AMD can sustain a breakout above $135, it has the potential to rally back toward the $150 to $160 price range. This favorable risk/reward setup presents an attractive entry point for investors looking to capitalize on a technical rebound. Fundamentally, AMD stands out with its robust growth trajectory and competitive edge across multiple high-growth markets, including data centers, AI, and gaming. The company’s EPYC server processors continue to gain market share from Intel, driven by their superior performance, energy efficiency, and cost-effectiveness. AMD’s recent MI300 series AI accelerators also position the company to compete effectively with Nvidia in the rapidly growing AI infrastructure market. Beyond AI, AMD’s consumer and gaming segments remain strong, with Ryzen processors and Radeon GPUs maintaining solid market penetration. Despite trading at 23-times forward earnings, which aligns with the industry average, AMD is projected to grow far faster than its peers, with 40% expected EPS growth compared to the industry average of 20%, and 22% expected revenue growth, far exceeding the industry’s 13%. This valuation suggests that AMD remains fundamentally undervalued, given its exceptional growth potential and strategic focus on high-demand markets. With continued strength in its data center and AI segments, AMD is well-positioned to outperform over the coming quarters. The trade To capitalize on AMD’s upside potential while limiting risk, consider buying a Feb. 21, 2025 $125/$150 Call Vertical at $7.70 Debit. This entails: Buying the Feb. 21, 2025 $125 Call at $10.85 Selling the Feb. 21, 2025 $150 Call at $3.15 Click here to View Updated Pricing in OptionsPlay This strategy provides a strong risk to reward for a bullish view on AMD while risking only $770 per contract if AMD is below $125 at expiration, while potentially making up to $1,730 per contract if AMD is above $150 at expiration. Maximum Reward: $1,730 Maximum Risk: $770 Breakeven: $132.70 DISCLOSURES: (none) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
