Advanced Micro Devices Inc (NASDAQ: AMD) is taking a hit in after-hours on Tuesday despite reporting market-beating financial results for its fiscal fourth quarter.
Investors are responding primarily to a 69% year-on-year increase in the company’s data centre sales to $3.86 billion, which fell short of $4.14 billion that analysts had forecast.
But the post-earnings weakness in AMD stock may have created an exciting opportunity for investors interested in buying and holding this AI name for the long-term, as per Rosenblatt analyst Hans Mosesmann.
AMD stock remains competitive vs Nvidia
AMD shares are worth owning after the company’s management guided for “strong double-digit percentage growth” in its top and bottom line this year.
Hans Mosesmann remains bullish on the semiconductor giant as he disagrees with the broader narrative that Advanced Micro Devices is losing momentum.
“AMD’s roadmap remains quite competitive, if not incrementally more competitive vs. Nvidia Blackwell,” he argued in a recent report, adding the “ROCm compiler technology and continued chiplet advantage helps offset the CUDA Nvidia moat.”
Other notable names that are currently bullish on AMD stock include famed investor and Mad Money host Jim Cramer who sees the chipmaker as the only one that could catch up to Nvidia.
Shares of Advanced Micro Devices are now down about 18% versus their year-to-date high.
AMD is not losing share to custom ASICs
In his research note, the Rosenblatt analyst also shrugged off concerns that custom ASICs are stealing share from GPUs.
“Nobody is shifting business away from AMD and Nvidia this year on the fly to a custom destined DC solution,” he told clients, adding the custom ASICs lack a significant foothold at the edge.
All in all, Hans Mosesmann is bullish on AMD stock because he has immense confidence in the leadership of Lisa Su and the sentiment has turned a bit too sour on AMD.
Note that Advanced Micro Devices shares are now down an alarming 50% versus their high in March of 2024.
How high could AMD shares fly in 2025?
The sell-off in AMD stock may prove to be an amazing buying opportunity considering Mosesmann is calling for upside in this AI play to $250.
His price target indicates potential for a whopping 135% gain from current levels. According to the Rosenblatt analyst’s research note:
AMD will capture double-digit DC GPU accelerated/AI compute unit share in next few years, and experience a TAM of $500 billion, which is half of the GPU gaming share of ~30% for the last generation.
Advanced Micro Devices earned $1.09 a share (adjusted) on $7.66 billion in revenue in its fiscal fourth quarter. Analysts, in comparison, were at $1.08 per share and $7.66 billion, respectively.
That said, AMD shares remain unappealing for income investors as they do not pay a dividend at writing.
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