Shares of Advanced Micro Devices (AMD) closed yesterday’s trading session up by 9.06%, a rise that continued even after the markets closed. The combined movement tipped the company’s market capitalization over the $300 billion mark for the first time, indicating that the AI boom is benefiting more than just market leader NVIDIA.
Citigroup analysts highlighted the stocks of AMD, NVIDIA, and Broadcom as preferred investment picks ahead of the session. This endorsement may have been a factor in the stocks’ upward trajectory. Semiconductors shipments were down by 19% last year — the largest blow since 2001. However, industry revenue is predicted to bounce back this year, with a projected growth of at least 11%. One exception to this upward trend could be Intel, whose performance is forecast to lag somewhat.
According to Citigroup, the negative impact of inventory adjustments in the server segment should subside in the first half of the year. This development will likely benefit Intel and AMD. The PC market is expected to return to seasonal patterns this quarter. As for the performance of AMD’s shares, they have more than doubled in value since their October lows. Notably, the price-to-earnings ratio for AMD’s shares is close to 50, significantly higher than the market leader NVIDIA, whose P/E ratio does not exceed 32. This disparity adds complexity to future serious growth predictions for AMD shares.
