(Bloomberg) — Shares of Advanced Micro Devices Inc. jumped Thursday, with the chipmaker extending its advance and hitting the latest in a string of new records this year.
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The stock rose 9.1%, a rise that led the company's market capitalization to close above $300 billion for the first time. Shares have more than doubled from their October lows.
The company is considered a key beneficiary of artificial intelligence, and last month optimism about new AI processors helped AMD shares recover from a weak forecast.
Earlier Thursday, Citigroup Inc. wrote that the company remains “very optimistic about the half-life numbers,” especially as “the AI market continues to grow” and all types of companies and organizations are buying all AI chips. The company named AMD alongside Nvidia Corp. and Broadcom Inc. one of his favorite stocks.
Still, the stock doesn't exactly look like a bargain after its recent gains. The shares are trading at almost 50 times estimated earnings, making them far more expensive than industry leader Nvidia, whose value is relatively lower at 32.
While analysts are broadly positive – more than three-quarters of companies tracked by Bloomberg recommend buying AMD – shares are essentially in line with the average price target, suggesting additional upside from here may be limited .
(Updates as of market close.)
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