AMD Stock Surges 2.89% on Bullish AI Upgrade

Advanced Micro Devices (NASDAQ: AMD) shares are experiencing significant premarket gains, trading at $133.32, up $3.74 (+2.89%) as of 8:19:55 AM EDT on Tuesday, June 24, 2025. The semiconductor giant’s stock momentum comes on the heels of a bullish analyst upgrade from Melius Research, which has transformed sentiment around AMD’s artificial intelligence capabilities. This positive movement represents a notable turnaround for the chipmaker, which has been working to establish itself as a formidable competitor in the rapidly expanding AI market.

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Melius Research analyst Ben Reitzes has upgraded AMD stock from “hold” to “buy,” simultaneously raising his price target to $175 from $110. This represents a significant 59% upside potential from the current trading price of approximately $129.58. Reitzes cited substantial improvements in AMD’s artificial intelligence chip capabilities and computing systems as key drivers for the upgrade. The analyst emphasized that “many things have changed for the better since the beginning of the year,” suggesting AMD has made meaningful progress in positioning itself within the competitive AI landscape. Reitzes noted that if his analysis proves correct, “the stock has a lot more to go, despite missing the initial move off the bottom.”

This upgrade comes at a crucial time as AMD works to challenge NVIDIA’s dominance in the AI accelerator market. The timing of this upgrade is particularly significant given AMD’s recent showcase of its AI data center systems. On June 12, AMD highlighted the price and performance advantages of its AI infrastructure over rival NVIDIA at a company event, while also previewing full-rack AI systems for customers. This demonstration appears to have strengthened analyst confidence in AMD’s competitive positioning.

AMD’s stock has demonstrated remarkable resilience and momentum, with shares closing at $129.58 on Monday, representing a gain of $1.34 (+1.04%) during regular trading hours before extending gains in premarket trading. The semiconductor company’s stock has shown strong year-to-date performance with a 7.28% return, significantly outpacing the S&P 500’s 2.44% gain over the same period. Despite experiencing notable volatility throughout the year, with prices ranging from a 52-week low of $76.48 to a high of $187.28, AMD has maintained positive momentum across multiple timeframes, posting impressive longer-term returns of 57.20% over three years and an exceptional 140.01% gain over five years. The current premarket surge to $133.32 suggests continued investor confidence in the company’s AI strategy and growth prospects, with the stock now trading closer to analyst price targets and showing technical strength after recovering from earlier 2025 lows.

AMD’s enhanced focus on artificial intelligence has positioned the company to capitalize on the growing demand for AI inference capabilities over the next three years. Reitzes specifically highlighted AMD’s advances in AI accelerators and computing systems, noting that the company is likely to benefit as hyperscale cloud computing companies and other enterprises invest heavily in AI infrastructure. The analyst sees particular promise in AMD’s platform for AI inferencing applications.

The company’s recent strategic partnerships further underscore its AI ambitions. AMD has forged alliances with HCLTech to develop future-ready solutions across AI, digital, and cloud computing, while also collaborating with Keysight Technologies on PCIe 6.0 development for high-speed AI applications. Additionally, AMD’s partnership with Microsoft to co-engineer custom silicon for next-generation Xbox consoles demonstrates the breadth of its technological capabilities.

However, Reitzes cautioned investors about AMD’s inherent volatility, noting the stock’s dramatic price swings from a high of $227 in 2024 to a low of $76 earlier this year. Despite this volatility, the analyst believes AMD’s current valuation presents an attractive entry point for investors seeking exposure to the AI revolution, particularly given what he sees as a “sustainable surge in inferencing” that should benefit AMD’s platform through 2026-2028.