Shares of Advanced Micro Devices Inc. (AMD) experienced a significant surge on Thursday, propelling the chipmaker to yet another record high this year.
The stock climbed by 9.1%, marking an impressive continuation of its upward trajectory and pushing the company’s market capitalization above $300 billion for the first time. AMD shares have more than doubled since hitting a low point in October.
AMD is widely regarded as one of the key beneficiaries of the artificial intelligence (AI) revolution. Last month, optimism surrounding the launch of new AI processors helped drive a recovery in AMD shares following a lackluster forecast.
Earlier on Thursday, Citigroup Inc. reaffirmed its bullish stance on semiconductor stocks, particularly emphasizing the growth potential of the AI market across various industries. The firm specifically highlighted AMD as one of its favored stocks, alongside Nvidia Corp. and Broadcom Inc.
However, despite its remarkable performance, AMD’s stock no longer appears to be a bargain. With shares trading at nearly 50 times estimated earnings, the valuation is significantly higher compared to industry leader Nvidia, whose price-to-earnings multiple stands at a relatively modest 32 times.
While analysts generally maintain a positive outlook on AMD — with more than three-fourths of firms tracked by Bloomberg recommending buying the stock — the current share price is in line with the average price target. This suggests that further upside potential from current levels may be limited.