Why AMD Stock Jumped 28% in June

Shares of Advanced Micro Devices (NASDAQ: AMD) were moving higher again last month as the chip stock made more acquisitions to push its AI strategy and unveiled its future plans and goals at its Advancing AI conference.

Additionally, the stock benefited from the broader upward trend in stocks on solid economic data and as concerns about the trade war faded.

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According to data from S&P Global Market Intelligence, the stock finished the month up 28%. As you can see from the chart below, the stock's gains primarily came in two stages. The first was in response to the Advancing AI event, and later in the month, as the broad market gained as tensions in the Middle East cooled, AMD got an endorsement from some big-name investors.

AMD data by YCharts

AMD is building momentum

AMD stock peaked in March 2024 amid the broader boom in AI but then fell sharply in the year following that as hopes that the company would seriously challenge Nvidia were largely unfulfilled.

However, after a strong first-quarter earnings report that showed impressive growth in both the data center and client segments, AMD is gaining momentum, and the stock looks well-priced.

AMD made a pair of AI acquisitions early in the month, including Brium, which gave the company a team of AI compiler and software experts, as well as experts in machine learning, AI inference, and other key areas. It followed that up the next day, June 6, by acquiring Untether AI, a developer of AI inference chips that it says are faster and more energy-efficient than competitors.

The following week, it impressed investors at its Advancing AI event, rolling out its new Instinct MI350 Series GPUs, which it said set a new "benchmark for performance, efficiency, and scalability in generative AI and high-performance computing." The conference also earned the company a number of favorable analyst notes, as Wall Street liked what it heard.

Finally, the stock gained in the last month of June as Melius Research upgraded the stock to a buy, and Cathie Wood's Ark Invest bought nearly 400,000 shares of the stock.

What's next for AMD

AMD was one of several tech stocks to pull back on Tuesday in a broad-based rotation to value and dividend-paying stocks, but its future still looks bright as demand for AI will continue to grow.

As the company capitalizes on data center demand and gains market share in the PC-focused client segment, the stock looks poised to continue gaining.

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Jeremy Bowman has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.