Shares of Advanced Micro Devices Inc. (NASDAQ:AMD) soared on Thursday, marking another milestone in its string of record highs this year.
The stock surged by as much as 7.9%, propelling the company’s market capitalization to exceed $300 billion for the first time. This surge comes as AMD shares have more than doubled since hitting a low point in October.
AMD is widely regarded as a key player benefiting from the rise of artificial intelligence (AI). Last month, optimism surrounding the company’s new AI processors helped it bounce back from a tepid forecast.
In a recent report, Citigroup Inc. expressed bullish sentiments towards semiconductor companies, particularly highlighting the growing AI market. The firm specifically identified AMD, alongside Nvidia Corp. and Broadcom Inc., as favored stocks in this sector.
However, despite the upward momentum, AMD’s stock appears pricey following its recent gains. With shares trading at nearly 50 times estimated earnings, it is considerably more expensive than industry leader Nvidia, which boasts a multiple of 32 times.
Although analysts generally hold positive views on AMD— with over three-quarters of the firms tracked by Bloomberg recommending buying the stock— shares are only 2% below the average price target. This suggests that further upside potential may be limited from current levels.
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Author Faith Yakubu 
