Chipmaker Advanced Micro Devices (AMD) has bright prospects in its core businesses and from its pending acquisition of Xilinx (XLNX), a Wall Street analyst said Monday. Meanwhile, AMD stock is approaching a buy point.
RBC Capital Markets analyst Mitch Steves on Monday reiterated his outperform rating on AMD stock and raised his price target to 100 from 92.
On the stock market today, AMD stock ended the regular session up 0.8% to 85.31. Earlier in the session, it climbed as much as 3.4% to 87.54.
In a note to clients, Steves updated his long-term thesis on AMD stock to include Xilinx. He sees “notable margin expansion” from economies of scale and cost-savings synergies related to the acquisition.
At the same time, AMD is likely to continue to take market share in central processing units and graphics processors for servers, he said.
AMD Stock Has Formed Double-Bottom Base
AMD could reach $5.50 in earnings per share in 2025, Steves said. That compares to an estimated $1.23 in earnings per share this year.
AMD announced its acquisition of programmable-chip maker Xilinx on Oct. 27. The all-stock deal was valued at $35 billion.
“As an important point of emphasis, we continue to believe the stock remains range bound for 2-4 months due to the all-stock transaction,” Steves said. “However, this does not impact the long-term thesis.”
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