Given the rise in Advanced Micro Devices (NASDAQ: AMD) in recent months, one could forgive investors for not knowing what to make of that move. Year to date, the stock has increased 70% following a massive sell-off in the 2022 bear market.
Indeed, the run-up has contributed to an elevated price-to-earnings (P/E) ratio, which makes it appear outrageously expensive. Nonetheless, AMD's growing prowess in artificial intelligence (AI) and a crucial alliance could make it a great buy, even at today's prices.
AMD has likely risen on the coattails of one of its most important rivals, Nvidia. Amid the increased focus on AI, that company's stock has surged to a nearly $1 trillion valuation as investors recognize the importance of chip stocks in the AI market.
Source Fool.com