Why AMD Stock Rose Today

Shares of Advanced Micro Devices (NASDAQ: AMD) climbed on Monday, following bullish analyst remarks.

By the close of trading, AMD's stock price was up about 4%.

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Second place could still be highly profitable

AMD doesn't have to be Nvidia. That's the view of Wedbush analyst Matt Bryson.

Bryson argues that there's no need for AMD to match its far larger rival's massive market share in advanced artificial intelligence (AI) chips. AMD's shareholders will do just fine if the chipmaking challenger can deliver robust sales of central processing units (CPUs) used in personal computers (PCs) and data center servers when it reports its fourth-quarter financial results on Feb. 3.

Bryson believes tight supplies of server CPUs will boost AMD's profit margins by enabling it to command higher prices. He noted that the chip designer's server CPUs are already some of its most lucrative products.

Bryson also pointed to sales to Chinese customers as another potential growth driver. The Trump administration authorized certain chip sales to China in January.

All told, Bryson sees AMD's stock price rising roughly 18% to $290 per share.

AMD's upcoming earnings release

Investors can expect to hear more about AMD's CPU sales and AI-focused growth initiatives during the company's conference call, which is scheduled to begin at 5:00 p.m. EST on Tuesday.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.