AMD (NASDAQ: AMD) stock price has generated big gains in the final quarter on the back of improving prospects for tech companies in 2020. Although AMD shares are trading at 52-weeks after rallying 134% in 2019, market analysts are anticipating the stock to notch $55 in the short term.
The company’s financial growth and the new product line are among the biggest price catalysts. Investors have been showing confidence in the potential growth from 7nm Ryzen, Radeon and EPYC processor.
The first full quarter of sales of these products led the company to generate almost 9% year over year consolidated sales growth in the latest quarter.
Bullish Sentiments Could Help in Hitting $55 Shortly
AMD stock price has already achieved substantial price appreciation in the past last twelve months on prospects of the new product line. However, the shares are still presenting upside potential in the coming days. This is because of the impact of strong sales growth from these products.
Baird analyst Tristan Gerra expects Advanced Micro Devices to post double-digit revenue growth in the following quarters. On the other hand, Wedbush analyst Matt Bryson claims that the new product line would help in lifting prices, which is likely to enhance margins and earnings.
RBC provided a price target of $53 with an Outperform rating. RBC analyst Mitch Steves says, “Improving data center demand and higher margin in 2020 would enhance profitability. The firms will raise estimates for semi stocks in Q1 and some data center build-outs were pushed into that quarter.”
Broader Market Outlook is Adding to Sentiments
The tech stocks, particularly semiconductors, have been highlighting the potential rebound in 2020. This is because of declining inventories and lower supplies from producers in 2019.
Investors are forecasting the substantial improvement in demand from gaming, A1, data center and other markets. The financial performance and strong backlog in the latest quarter indicate healthy future fundamentals. Therefore, analysts are expecting AMD stock price to trade around $55 in the coming days.