Advanced Micro Devices, Inc. (AMD), based in Santa Clara, California, is a leading semiconductor company with a market cap of $224.9 billion. The company provides a diverse range of high-performance and adaptive processor technologies, including CPUs, GPUs, FPGAs, and Adaptive SoCs. AMD employs competitive pricing strategies to challenge rivals like NVIDIA Corporation (NVDA).

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and Advanced Micro Devices fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the semiconductor sector. AMD stands out in the semiconductor industry with its diverse portfolio of high-performance processors, including CPUs, GPUs, and Adaptive SoCs, serving markets like gaming, data centers, and personal computing. 

AMD’s focus on innovation, such as advancements in 7nm and 5nm process technologies, positions it as a key player in the market. Strategic partnerships and successful product launches further enhance its market presence and growth potential.

Despite its strengths, Advanced Micro Devices is currently sailing through choppy waters. The stock is down 39% from its 52-week high of $227.30, achieved on Mar. 8. Moreover, shares of AMD have climbed 3.2% over the past three months, underperforming the S&P 500 Index’s ($SPX) 12.6% gains during the same time frame.

Over the long term, AMD is down 6% on a YTD basis, and the stock has soared 18.6% over the past 52 weeks. By contrast, $SPX is up 27.7% in 2024 and 33.9% over the past 52 weeks, slightly outshining AMD's gains over the same time frame. 

AMD has been trading below its 50-day and 200-day moving averages since the end of October, indicating a slightly bearish price trend.

Advanced Micro Devices shares rose more than 3% after International Business Machines Corporation (IBM) announced it had formed a partnership with the company to supply MI300x accelerator chips for its cloud network.

On Oct. 29, AMD shares soared 3% after reporting its Q3 results. Its adjusted EPS of $0.92 beat Wall Street expectations of $0.91. The company’s revenue was $6.8 billion, surpassing Wall Street forecasts of $6.7 billion. For Q4, AMD expects revenue to be between $7.2 billion and $7.8 billion.

To emphasize the stock’s underperformance, it is worth noting that Advanced Micro Devices’ top rival, NVDA, continues to outshine AMD. Shares of NVIDIA have surged a whopping 213% over the past 52 weeks and 187.6% on a YTD basis. 

Despite Advanced Micro Devices' underwhelming stock performance, analysts are strongly bullish on the stock's outlook. The stock has a consensus rating of “Strong Buy” from 38 analysts covering it, and the mean price target of $189.92 is a premium of 37% to current levels.