The first time I wrote about Advanced Micro Devices (NYSE:AMD), I said the tech stock could maintain its momentum and stay hot, adding that for “long-term buy-and-hold investors AMD stock does appear attractive at current prices.”
At the time, the AMD traded at just $28.90. It’s now up to $57, and could easily be the best performing stock on the S&P 500 for the third straight year. All as it continues to chip away at market share of major competitors, like Intel (NASDAQ:INTC) and NVIDIA (NASDAQ:NVDA).
The best part – after gapping lower on coronavirus fears, the AMD stock just refilled its bearish gap and could run to $65, near-term. In fact, once it breaks above double top resistance at $58.13, it could easily rocket higher with sizable catalysts.
Analysts are Clearly Still Bullish on AMD Stock
As I noted in early April 2020, Piper Jaffray’s Harsh Kumar upgraded the stock to “Overweight” from “Neutral” with a new price target of $56.
Northland Securities analyst Gus Richard has target of $52.50, noting, “AMD has become a quality semiconductor franchise.” He also noted AMD could grow at an annualized rate of 20% over the next four years, “driven by both strong products and technology leadership.”
From here, I wouldn’t be shocked to see even more upgrades, as we near AMD’s first quarter 2020 results on April 28 after the closing bell. Guidance should also reflect the sizable demand it’s seeing from folks working from home lately.
More Upgrades on the Way
Companies like Zoom Video (NASDAQ:ZM) have seen a monster boost in demand from those working at home. In fact, according to Goldman Sachs analyst Heather Bellini, “due to COVID-19, more organizations are reliant on communication tools that allow their remote workforce to collaborate effectively.”
To stay up and running, a company like Zoom Video needs “additional data center space in order to handle the surge in demand. Zoom Video has seen daily users surge from only 10 million back in December to 200 million recently,” as highlighted by Tip Ranks. The end result is huge boost in demand for data center chips from the likes of AMD.”
Advanced Micro Devices is also benefiting from cloud-computing service demand. All as companies race to invest in infrastructure to handle the demand from every one staying at home, working from home, playing at home, gaming at home, and schooling from home.
“If you look at Amazon or Azure and how much infrastructure usage increased over the past two weeks, it would probably blow your mind how much capacity they’ve had to spin up to keep the world operating,” said Dave McJannet, HashiCorp Inc., which provides tools for both cloud and traditional servers. “Moments like this accelerate the move to the cloud.”
Those are just a handful of catalysts for AMD growth. Remember, later this year, new gaming consoles from Microsoft (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE) will be launched with AMD chips, as I’ve mentioned. That’s in addition to chipping away at market share from Intel and NVIDIA.
The Bottom Line on AMD Stock
For the last two years, AMD has been the top performer on the S&P 500. I don’t see that changing this year, as it explodes higher with innovation and sizable demand.
Later this year, I wouldn’t be shocked to see AMD stock at $65, even $70 once it breaks to new highs above double top resistance. In my opinion, AMD is still a strong buy and hold.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.