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AMD Stock Outlook: EPS Growth and Analyst Confidence Surge

AMD shares have underperformed recently, declining 38.5% year-on-year, but analysts project a solid 42% growth in EPS for 2025, with revised ratings suggesting a 'Moderate Buy'. Positive sentiment is bolstered by eased trade tensions and a favorable analyst outlook.

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AI Rating:   7

Advanced Micro Devices, Inc. (AMD) has witnessed a notable downturn, with shares declining 38.5% over the past year while the S&P 500 has appreciated. This underperformance also extends to the S&P Semiconductor SPDR ETF, which has declined by 14.1%. While the stock recently did experience a 4.5% rise due to improved investor sentiment stemming from easing U.S. trade tensions and positive analyst coverage, its overall performance indicates caution among investors.

Earnings Per Share (EPS) is a highlight in AMD’s outlook, with analysts forecasting a substantial growth of 42% to $3.72 per diluted share for the fiscal year ending December 2025. This growth projection is pivotal as it signifies robust future profitability potential, which could lead to increased stock demand should the company meet or exceed expectations.

Moreover, AMD has displayed an impressive earnings surprise history by beating or meeting the consensus estimate in the last four quarters. Such consistency typically enhances investor confidence and could positively influence stock prices in the short to medium term.

The analyst outlook is another crucial factor to consider. The current consensus is a “Moderate Buy” based on recommendations from 41 analysts, with 26 issuing a “Strong Buy”. Despite a slight decline from a month prior in the bullish outlook, the recent initiation of coverage by Seaport Global Securities at a “Buy” rating with a target of $110 contributes to a positive sentiment around the stock.

A noteworthy point is the average price target of $141.22, suggesting a 45.1% upside potential from current price levels, with a Street-high target indicating a remarkable potential upside of 131.1%. This reflects a significant degree of optimism surrounding AMD’s future performance.

Overall, the combination of anticipated EPS growth, solid analyst ratings, and broader market conditions could create a favorable environment for AMD's stock performance within the next few months.

Stocks:  AMD