Why Now Is the Ideal Time to Buy AMD Shares

Advanced Micro Devices (NASDAQ: AMD) isn’t exactly under the radar. However, it has fallen by the wayside quite a bit, relegated to a role of second fiddle to Nvidia.

This hasn’t been great for AMD’s share price, but it has created an interesting opportunity. Despite being initially late to the AI party, AMD has gone a long way in catching up. The stock’s fundamentals have steadily been improving — but the market hasn’t reacted yet. 

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Wall Street analysts are immensely bullish — right now, the average 12-month price forecast for AMD implies a 37.84% upside, while the Street-high estimate implies a 66.41% upside.

But that’s not all there is to the story…

A slew of top Wall Street analysts have raised their price targets on AMD as of late. The reason is simple — on February 3, AMD held its Q4 and FY 2025 earnings call. Both earnings and revenues came in above consensus estimates, and analysts reacted positively to management’s commentary.

But do the fundamentals support these bullish cases? At WallStreetZen, we built our own quant rating system, which takes into account 115 metrics to evaluate stocks. Right now, AMD ranks in the top 13% of all the stocks we track when it comes to the fundamentals. This gives it a Zen Rating of B, and stocks of this caliber have historically provided an average annual return of 19.88%.

To get a better understanding of what exactly made all those Wall Street analysts so bullish, we have to look at specifics. For this, we’ll turn to our Component Grade ratings — as each Zen Rating is a composite of 7 Component Grade ratings.

Growth is AMD’s biggest strength. In this category, the stock ranks in the 87th percentile — equivalent to or better than 87% of stocks, or, in other words, in the top 13%. The company’s earnings are forecast to grow at an exceptional rate of 74.77% per year — ahead of the semiconductor industry’s average of 58.2%. On top of that, revenues are expected to grow by 34.09%.

Another strong area is Sentiment, which is not particularly surprising once you remember those analyst price target upgrades. AMD shares rank in the top 19% for Sentiment — in addition, 32.34% of the insider transactions tied to the stock in the past 12 months have been purchases, so the bullishness isn’t strictly limited to analysts either.

AMD also stacks up quite favorably against peers and rivals. It belongs to the Semiconductor industry, which has an Industry Rating of B, and is currently ranked 9th out of 65 stocks within the industry.

But don’t let all those C ratings fool you — while they might not be areas where AMD excels, they aren’t red flags either. Take Financials and Safety, for example — both ratings are C’s, but the stock ranks in the top 35% and 36% in these categories, respectively.

Value is another category where this holds true — here, AMD shares rank in the top 34%.

Right now, the case is compelling. We have pretty exceptional growth expectations, a solid balance sheet, a fair valuation, and a wave of enthusiasm from Wall Street.

There’s just one problem — the opportunity won’t be there forever. The same earnings beat that caused the torrent of price target increases led to massive profit-taking. Despite beating estimates, AMD shares are down about 15% from the time of the earnings call.

That’s a pretty big discount, and it’s hard to ignore. AMD’s fundamentals are there — and right now, this seems like the best opportunity for opening a long position that we’ve seen in a while.

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