11 Best Data Center Stocks To Buy According to Analysts

07. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Upside Potential: 27.00%

Latest Average Share Price Target: $193.45

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a key player in the data center space, making it a strong candidate for inclusion in our list of the 11 Best Data Center Stocks to Buy According to Analysts. AMD’s advanced semiconductor solutions are integral to powering the data centers that support today’s AI, cloud computing, and enterprise workloads. With its broad portfolio of data center-focused products, including EPYC CPUs and Instinct GPUs, Advanced Micro Devices, Inc. (NASDAQ:AMD) is increasingly chosen by hyperscalers and enterprises to handle intensive data processing tasks, making it a formidable competitor in the data center market.

In its Q2 2024 earnings call, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported earnings per share (EPS) of $0.69, surpassing expectations of $0.678. This strong performance was primarily driven by its data center segment, which saw a staggering 115% year-over-year growth, generating $2.8 billion in revenue. AMD’s Instinct MI300 GPU shipments were a major contributor, alongside a robust double-digit increase in EPYC CPU sales. This underscores the company’s ability to capture market share from rivals by offering higher performance and energy-efficient solutions for hyperscale and enterprise workloads.

The company’s total revenue reached $5.8 billion, up 9% year-over-year, with data center sales accounting for nearly 50% of the overall sales in Q2 2024. Advanced Micro Devices, Inc. (NASDAQ:AMD) has expanded its gross margins by over 3 percentage points and posted a 19% growth in EPS. The consistent demand for its fourth-generation EPYC processors, especially from large clients such as Netflix and Uber, reflects the strong market acceptance of AMD’s solutions. Additionally, the availability of over 900 AMD-powered cloud instances has increased by 34% year-over-year, highlighting its growing footprint in cloud computing.

Looking ahead, Advanced Micro Devices, Inc. (NASDAQ:AMD) is positioning itself for continued growth with the introduction of its next-generation Turin family featuring Zen 5 architecture. With 192 cores and advanced memory technologies, Turin aims to solidify Advanced Micro Devices, Inc. (NASDAQ:AMD) leadership in the data center market. Advanced Micro Devices, Inc. (NASDAQ:AMD) ability to innovate and meet the ever-growing demands of AI and cloud services makes it a compelling stock for investors seeking exposure to the booming data center industry.