Can AMD Stock Hit $600? Here’s What One Top Investor Predicts

**Advanced Micro Devices (NASDAQ:AMD) **received quite a vote of confidence over the past few months from two of the biggest names in the tech scene. Both OpenAI and Meta Platforms have committed to using AMD’s GPUs as part of their long-term AI infrastructure, signing mega-deals to utilize the chipmaker’s technology. Both agreements involve hundreds of thousands of GPUs, and each multiyear deal will likely end up being worth around $100 billion.

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While that’s a hefty wad of cash on the horizon, in the here and now, AMD’s share price hasn’t been trending in the right direction. The broader headwinds weighing on big tech companies, namely the oft-repeated worries about massive capex spending, have caught up with AMD as well.

That presents a bit of a mismatch, according to one top investor, known by the pseudonym Stone Fox Capital.

“AMD still isn’t priced right for the AI opportunity ahead,” states the 5-star investor, who is among the top 3% of stock pros covered by TipRanks.

Looking closely at the OpenAI and Meta deals, Stone Fox argues that these agreements will provide more than just revenues. The investor points out that they will serve to “validate” AMD’s technology, leading to additional deals with more customers.

Stone Fox acknowledges that some have criticized the contours of the deals, both of which have required AMD to issue large numbers of warrants (up to 160 million shares of AMD common stock in each case).

While that’s a significant amount of company shares that AMD is ready to part with, the warrants will only vest upon reaching certain, agreed-upon milestones. Moreover, Stone Fox notes that this structure binds the fates of AMD with these two tech titans, likely for the better.

“OpenAI and Meta will both be entrenched in the future development plans, leading to far more revenues in follow-on contracts,” adds Stone Fox.

The investor further posits that the two deals could very well propel AMD toward its internal EPS target of $20 or more within three to five years. If AMD trades at 30x these baseline targets, it would hit $600 per share.

“Investors should use this weakness to build new positions,” concludes Stone Fox, who rates AMD a Strong Buy. (To watch Stone Fox Capital’s track record, click here)

Though slightly more tempered, Wall Street is thinking along these bullish lines. With 23 Buys and 8 Holds, AMD enjoys a Moderate Buy consensus rating. Its 12-month average price target of $286.04 points to a 40% upside from current levels. (See AMD stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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