Why Is AMD Stock in Focus Today?

Advanced Micro Devices Inc shares edged lower on Thursday. The stock drew attention due to the ripple effect from NVIDIA Corp's strong quarterly results, with investor focus intensifying on AI chip demand and data center spending.

Nvidia Results Keep AMD in the Spotlight

Nvidia shares surged over 7% in pre-market trading Thursday after the company reported second-quarter revenue of $96.22 billion, surpassing the $92.18 billion expectation. Adjusted earnings per share came in at $2.22, also above the $2.10 estimate.

Nvidia guided third-quarter revenue between $105.84 billion and $110.16 billion and disclosed $99 billion in remaining share repurchase authorization at quarter-end.

Optimistic commentary on AI demand keeps AMD in focus, as investors typically use results from major AI infrastructure companies to gauge expectations for GPU demand and data center spending. S&P 500 futures were up 0.3% ahead of the open.

AMD Competes Directly with Nvidia in AI Chips

AMD and Nvidia compete in GPUs, data centers, and artificial intelligence.

Nvidia leads the market in AI accelerators and discrete GPUs, while AMD competes with its Instinct GPU product line along with Ryzen and EPYC processors.

Both companies design their own chips and rely primarily on Taiwan Semiconductor Manufacturing Company Ltd for manufacturing.

AMD Analyst Consensus and Recent Rating Changes:

AMD stock holds a Buy rating with an average price target of $595.91. Recent analyst rating changes include:

Raymond James: Upgraded to Strong Buy

BMO Capital: Initiated with Outperform rating

Argus Research: Buy

Major ETF Holdings

iShares Semiconductor ETF: Weight 8.10%

CoreValues America First Technology ETF: Weight 7.74%

ARK Next Generation Internet ETF: Weight 7.00%

Significance: Given AMD's high weightings in these funds, any large-scale inflows or outflows into these ETFs could force the funds to automatically buy or sell the stock.

AMD stock movement: As of Thursday's writing, Advanced Micro Devices shares were down 0.49% at $478.55.