Loop Capital backs AMD as a hidden gem set to surge

In the financial markets, Loop Capital's analyst Gary Mobley has recently provided an optimistic forecast for Advanced Micro Devices, indicating that the company is well-positioned to recover despite its poor stock performance last year. The semiconductor firm, which finds itself at the intersection of evolving hardware architectures, is expected to capture increased market share, particularly from competitors like Intel, as significant transitions occur within the CPU market. The analyst's report, released on January 14, 2025, cited investor sentiment as low, presenting an attractive risk-reward situation for potential investors. Mobley's buy rating for AMD incorporates a price target of $175, signifying an anticipated increase of nearly 50% from its current valuation. His analysis highlights that AMD shares have largely underperformed relative to the PHLX Semiconductor Sector index in 2024, consequently suggesting that the shares are undervalued. While AMD's stock fell 18% last year, the SOX index, which reflects the semiconductor sector's performance, experienced a gain of nearly 20%. The stark disparity in performance has led Mobley to further reinforce his position on the stock, viewing it as an opportune entry point for investors. Considering the competitive landscape, Mobley emphasized AMD's potential to exploit Intel's difficulties, particularly as Intel has faced challenges in maintaining its dominance within the x86 CPU market. By 2028, the analyst predicts AMD will increase its market share significantly within both personal computers and general server markets. This projected trajectory contrasts with the current performance of AMD stock, which has seen a 3% decline thus far in 2025. Nevertheless, the future outlook remains promising according to Mobley’s analysis, reflecting a broader confidence shared by other market analysts. As the technology sector continues to undergo transformations, AMD appears to be at the forefront, benefiting from structural shifts in computing needs. Analysts have predominantly rated AMD favorably, with data showing that 40 out of 53 analysts maintain a buy or strong buy rating for the stock, reflecting the consensus for optimism surrounding the company’s growth prospects. As the semiconductor industry evolves, AMD's position may help it capitalize on competitor setbacks, making it a focal point for investors looking to navigate this dynamic market environment.