Advanced Micro Devices (NASDAQ: AMD) stock has pulled back from its highs, but i think buying the stock ahead of its July 22 Advancing AI event in San Francisco will be a smart move. It looks like there will be a few catalysts from the event that could help propel the stock higher, including raised guidance and a major new customer announcement.
The first big catalyst could be raised guidance, both for the near term and long term. AMD typically reports its second-quarter results in early August, and it wouldn't be surprising to see the company pre-announce strong Q2 results at this event. Bank of America analyst Vivek Arya recently said he expects a beat-and-raise quarter from AMD, given "exceptional" demand for server processors and the company's central processing units (CPUs) continuing to take market share. Meanwhile, Jefferies analyst Blayne Curtis thinks AMD could match Nvidia's call for a $200 billion total addressable market (TAM) for data center CPUs, up from its earlier projection of $120 billion. This would help lift its long-term outlook.
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Another big potential catalyst for the stock is AMD officially announcing Anthropic as a new customer for its graphics processing units (GPUs). Anthropic has reportedly been advertising to hire engineers who are proficient with AMD's ROCm software platform, which is a strong indication that it is set to be its next big customer. After giving large equity stakes to OpenAI and Meta Platforms as part of previous large GPU partnerships, investors will be closely watching to see whether this is a more conventional deal. Curtis also thinks AMD could announce Microsoft as a GPU customer.
I'd also expect AMD to provide updates on its CPU and GPU road maps. While this might not be quite as exciting as raised guidance or new customer announcements, at the end of the day, AMD's technology advancements will be a big driving force moving forward.
While AMD has a near-term catalyst with its Advancing AI event, I think the stock is much more than a near-term trade. The company is riding two of the most powerful trends in AI infrastructure with inference and agentic AI, and it should see explosive growth over the next few years, both in GPUs and CPUs.
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