What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) jumped 9.4% in the afternoon session after Piper Sandler analysts maintained a Buy rating and raised the price target from $125 to $140. Following talks with management, the analysts became more bullish on AMD's AI business and expect the segment to grow even faster when the tariff headwinds in China have passed. They also highlighted the growing conviction on Wall Street regarding one of AMD's hyperscaler clients.
Separately, stocks rebounded as reports pointed to easing tensions between Israel and Iran. The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. This development triggered a significant decline in oil prices, easing inflation concerns.
Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week.
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What The Market Is Telling Us
AMD’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5% on the news that chip stocks rallied at the start of the week as investor optimism rose following trade discussions between U.S. and Chinese officials in London.
Semiconductor companies have been among the hardest hit by the dispute, with key technologies subject to export controls. These restrictions have disrupted supply chains, creating uncertainty for both revenue growth and long-term planning.
Following the talks, investor sentiment rebounded on expectations that some of these constraints may soon be lifted. U.S. National Economic Council Director Kevin Hassett reinforced this outlook, "Our expectation is that ... immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters."
Separately, Citi analyst Christopher Danely raised the stock's price target from $100 to $120, reflecting growing market optimism as the company prepared for its Advancing AI Day on June 12, 2025. The analyst expected AMD to launch its latest AI product and announce new customers such as Amazon Web Services or, potentially, OpenAI.
AMD is up 5.5% since the beginning of the year, but at $127.25 per share, it is still trading 30.8% below its 52-week high of $183.96 from July 2024. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,336.
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