Advanced Micro Devices (AMD) Collaborates To Accelerate AI-Driven Drug Discovery With New Alliances

Advanced Micro Devices (AMD) experienced a notable increase of 35% over the last quarter, amidst its key collaboration with Oracle Cloud Infrastructure and Absci to boost AI-driven drug discovery using AMD's advanced hardware. This partnership aligns with the overarching market optimism as the major U.S. stock indexes reached record highs, enhanced by expectations of Federal Reserve rate cuts. AMD's significant share buybacks and a partnership with HCLTech for digital transformation may have provided additional support, while some market dynamics, like its exit from the Russell Top 50 Index, might have countered these upward trends.

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The recent collaboration between Advanced Micro Devices (AMD) and Oracle Cloud Infrastructure, as well as Absci, could potentially impact the company's revenue and earnings forecasts by enhancing its AI-driven capabilities. This aligns with ongoing trends of accelerated AI adoption, which might bolster AMD’s market position and revenue streams, especially in the high-performance computing sector. Despite AMD's stock exiting the Russell Top 50 Index, its strategic partnerships may counteract potential negative impacts from this exit.

Over a five-year period, AMD's total return, including share price and dividends, was 108.11%, illustrating substantial long-term growth. However, over the past year, the company underperformed compared to the US Semiconductor industry, which returned 45.1%, and the broader US market, which saw a 19.1% increase.

AMD's current share price of US$159.54 reflects a 16.44% discount relative to the consensus price target of US$185.77. This suggests that while the market may have high expectations, analyst consensus indicates room for price appreciation. However, geopolitical tensions and export restrictions continue to pose challenges, potentially impacting long-term revenue assumptions. As AMD progresses, it must navigate these complexities in order to sustain its growth trajectory and align market expectations with its strategic initiatives.

According our valuation report, there's an indication that Advanced Micro Devices' share price might be on the expensive side.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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