We recently published a list of 12 Most Promising AI Stocks According to Wall Street Analysts. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against other most promising AI stocks according to Wall Street analysts.
Artificial intelligence (AI) continues to accelerate rapidly, moving from emerging technologies to influencing how businesses carry out operations. As per SAP, the changes occurring in 2025 revolve around autonomous AI agents, specialized AI models, user interface design, and enterprise adoption patterns. On 13th January, an AI behemoth highlighted that the first Trump Administration focused on America’s strength and success in AI, boosting an environment where the broader US industry can compete.
Therefore, mainstream AI is now a critical part of every new application, which helps fuel economic growth, promote US interests, and make sure that America can sustain its leadership in cutting-edge technology. On a related note, Trump announced billions of dollars in private sector investment focused on building AI infrastructure in the country.
Trump Announces $500 Billion Investment for AI Infrastructure
US President Donald Trump announced a private sector investment of up to $500 billion focused on financing infrastructure for AI, targeting to outperform rival nations in the business-critical technology. Mr. President went on to add that ChatGPT’s creator OpenAI, SoftBank, and Oracle are discussing a JV called Stargate, which is expected to build data centers and create over 100,000 jobs in the US. Notably, these companies, together with several other equity backers of Stargate, decided to commit $100 billion for immediate deployment. The remaining investment is expected to take place over the upcoming 4 years.
As per Trump, this is the largest AI infrastructure project in history. Also, Stargate is expected to build the physical and virtual infrastructure which will focus on powering the next generation of AI, including data centers around the US.
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AI Rally to Continue in 2025, Says UBS
As per UBS, the AI rally has aided in driving 2 straight years of healthy returns for the NASDAQ Composite, which also includes a 28% rally last year. The Mag 7 group of technology stocks drove more than half of the S&P 500’s gains in 2024. In the previous year, continued upward revisions in AI capex from the Big 4 tech giants supported keeping the AI rally on track. UBS expects the upward revisions to continue over the near term.
Even though AI revenues might again lag behind capex in 2025, UBS expects that AI monetization will improve sharply in 2025. The AI adoption continues to accelerate across industries and is well-placed to broaden in 2025. Also, the arrival of more clearly useful AI agents is expected to further support return on investment (ROI).
Our Methodology
To list the 12 Most Promising AI Stocks According to Wall Street Analysts, we conducted extensive research and scanned through several online rankings. After getting an initial list of 15-18 stocks, we shortlisted the ones in which analysts saw upside potential. Finally, the stocks were arranged in ascending order of their average upside potential, as of January 21, 2025. We also mentioned hedge fund sentiments around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Advanced Micro Devices, Inc. (NASDAQ:AMD)
Average Upside Potential: ~49.6%
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading player in the broader AI industry as a result of its focus on offering cutting-edge hardware solutions suited for AI workloads. The company continues to benefit from the growing demand for GPUs. The company’s data center revenue, which is mainly aided by AI accelerators, shot up 122% YoY in Q3 2024. Advanced Micro Devices, Inc. (NASDAQ:AMD)’s revenue growth is poised to accelerate in 2025, courtesy of its AI chip technology advancement. Also, customers expanding their use of the company’s products in their data centers will add to this revenue growth.
Citi maintained a “Buy” rating on the company’s shares and anticipates healthy demand in data centers, AI, and communication segments. The firm expressed optimism about Advanced Micro Devices, Inc. (NASDAQ:AMD), which stems from the potential upside from AI sales. The company’s potential in the AI accelerator market is significant, thanks to the strong growth of AI applications throughout industries. AMD CEO Lisa Su expects the AI accelerator market to reach $500 billion by 2028, driven by advancements in agentic chatbots, AVs (autonomous vehicles), and smart manufacturing systems.
Even if Advanced Micro Devices, Inc. (NASDAQ:AMD) captures a mid-single-digit share of this dynamic market, it can see billions of dollars in revenue. The company’s emphasis on high-volume AI workloads and its capability to provide competitive performance at attractive price points can help gain traction across a wide spectrum of customers, from cloud service providers to enterprise data centers.
Overall, AMD ranks 3rd on our list of most promising AI stocks according to Wall Street analysts. While we acknowledge the potential of AMD as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
