AMD Worth Nearly As Much As JPMorgan After Stock Breaks $500 Level: Retail Confidence Climbs

• AMD rose 8% on Tuesday and extended those gains overnight.
• The majority of the analysts rate the stock ‘Buy,’ but they expect the gains to cool off.
• AMD said its next-gen CPU, known as Venice, has gone into volume production with TSMC.

Advanced Micro Devices shares surged nearly 8% to close at $503.89 on Tuesday, before adding another 1.2% in overnight trading, crossing the crucial $500 threshold for the first time.

With a market capitalization of $821.6 billion, AMD is now within striking distance of JPMorgan, which had a market capitalization of $821.9 billion, and remains comfortably ahead of tech heavyweights Intel and Oracle.
 

Chip stocks have been on a tear lately, with AMD’s momentum accelerating after a series of announcements from Taiwan. During a visit to Taipei last week, AMD CEO Lisa Su unveiled a $10 billion investment plan to expand capacity and deepen partnerships to boost production of the company’s CPUs and other components.

Recent Catalysts For AMD

Beyond its partnership with contract manufacturer Taiwan Semiconductor Manufacturing Co., AMD is collaborating with Taiwan-based ASE and SPIL, as well as other industry partners, to develop and qualify next-generation wafer-based 2.5D bridge interconnect technology.

AMD also announced that its next-gen CPU, known as Venice, has entered volume production using TSMC's advanced 2-nanometer manufacturing process, with future production also planned in Arizona. 

The 2 nm process allows chips to pack in more transistors, improving performance and energy efficiency, and makes “Venice” the first high-performance computing chip to reach production on TSMC’s latest node.

“The overall CPU market has had ​significantly higher demand than any of us predicted a year ago,” Su told reporters during her visit. “I would say the CPU market is ​tight.”

AMD Stock Move, Retail View 

Tuesday’s rally in AMD came amid a broader rebound in tech stocks. The Invesco QQQ Trust Series 1 (QQQ), which tracks the Nasdaq stocks, added 1.8%, while chips-focused iShares Semiconductor ETF (SOXX) gained 6.1%. AMD stock has risen for four straight sessions, up 22% cumulatively, and is up 135% year to date.

On Stocktwits, the retail sentiment for AMD shifted to ‘neutral’ from ‘bearish.’ Message volume for the stock has more than tripled on the platform over the past 30 days.

“We made it, thank the Lord God! Congratulations to all you bagholders like myself. I've been here since when I bought it for $12.50 a lot of heartaches but we all made it,” a trader said excitedly. 

Others speculated that AMD might announce a stock split, which – if it happens – would drive the stock even higher. “$AMD holding until $1000 before they split,” said another trader.

Currently, 41 out of 51 analysts rate the AMD stock ‘Buy’ or higher, and 10 rate it ‘Hold,’ per Koyfin data. However, their average price target of $472.17 implies a 6% downside from the stock’s last close.

AMD’s forward 12-month price-to-earnings ratio is 57.9x, making it more attractive than Intel’s 117.3x but still more expensive than Nvidia’s 21.5x, according to Koyfin.

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