After a spectacular run-up in this year’s first half, Advanced Micro Devices (NASDAQ:AMD) stock took a breather in June and the first half of July. However, this is probably just a setup for the next leg up. Advanced Micro Devices (commonly known as just AMD) is developing a chip that could be a game-changer, and the company’s chief executive issued a major announcement that bolsters the bull case.
AMD’s next earnings release is scheduled for Aug. 1. Yet, you don’t have to wait until then to take a share position in AMD. Even before the earnings report, there are compelling reasons to invest in AMD for the long run.
Two Analysts Target $150 for AMD Stock
It’s worthwhile to see what Wall Street’s experts have to say about AMD. They’re mostly bullish, as 24 out of 31 analysts recently issued “buy” ratings on AMD stock. That’s not, by itself, a reason to invest in AMD, but it’s notable nonetheless.
Interestingly, two analysts have set the same AMD share-price target of $150. One of them is Wells Fargo analyst Aaron Rakers, who is optimistic about AMD’s prospects in 2023’s fourth quarter. That, Rakers posits, is when AMD could benefit from “a fully materializing EPYC Genoa + Bergamo product cycle” and the launch of the company’s MI300 chip.
Another analyst (or more accurately, another analyst firm) that published a $150 price target on AMD stock is Wolfe Research. Reportedly, the Wolfe Research analysts expect AMD to benefit from “some” contribution from new technology markets in 2024; these markets would include telecom as well as the MI300 chip for artificial intelligence (AI), the analysts suggest.
AMD Chief Executive’s Big Announcement
Clearly, there’s anticipation building for AMD’s MI300 chip. However, that’s not the only development that’s putting AMD in the spotlight now.
Sure, the company’s AI-compatible hardware projects could help to propel AMD stock to $150 or higher. What could really unleash AMD’s growth potential, though, is the company’s willingness to diversify its supply chain.
Currently, AMD depends heavily on Taiwan Semiconductor (NYSE:TSM) for its hardware components. That could change in 2023 and 2024, however. In a bombshell announcement, AMD CEO Lisa Su recently revealed that her company is “considering other manufacturing capabilities” besides Taiwan Semiconductor.
Su added that AMD “would like to use manufacturing [sites] across different geographies to give us some flexibility.” This would, Su claimed, help to ensure that AMD “the most resilient supply chain.”
This is a brilliant move for Su and AMD. Investors need to know that AMD isn’t dependent on any single supplier. With multiple sources of essential hardware components, AMD should be able to get products to the market more efficiently.
That’s great news for all parties concerned — though maybe not for Taiwan Semiconductor. All in all, Su’s announcement is a watershed moment for the entire U.S. chipmaking sector.
Don’t Miss the Moment With AMD Stock
It’s not necessary to wait for AMD to release its quarterly earnings if you’re eager to take a share position. Clearly, there are already catalysts that favor AMD in the coming quarters.
I’ll admit, there’s no guarantee that AMD stock will reach $150. Nevertheless, it makes sense to at least hold a few AMD shares now, in anticipation of continued company growth under Su’s strong leadership.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
