CNBC’s Jim Cramer and HSBC analysts offered contrasting views on Advanced Micro Devices, Inc (NASDAQ:AMD), with the debate centered on valuation versus long-term AI-driven growth.

Cramer Sees More Upside From AI Demand

Cramer defended AMD following the downgrade, arguing the stock still has room to rise, CNBC reported on Monday.

He said AI-driven demand for CPUs will continue to support the company’s growth and push shares higher despite recent gains.

HSBC Downgrades On Valuation Concerns

HSBC downgraded AMD to Hold from Buy, even as it raised its price forecast to $340 from $335.

The firm noted the stock has already re-rated significantly, moving from a 19x to a 33x multiple on 2027 earnings estimates, and now trades near its 52-week high after a 265% rally over the past year.

Limited Earnings Upside Cited

HSBC analysts noted constrained upside in earnings due to capacity constraints.

They applied a 31x price-to-earnings multiple to their revised 2027 EPS estimate and also introduced 2028 projections, signaling a more cautious outlook despite AMD’s strong performance.

Last week, Cramer outlined a bullish view on AMD and its semiconductor peers, tying their outlook to continued strength in data centers and the broader AI-driven technology shift.

Cramer said he expects an upside surprise from AMD’s upcoming results and recommended buying the stock ahead of earnings.

He highlighted CEO Lisa Su’s leadership and expressed confidence in the company’s position in the semiconductor and AI ecosystems.

Data Center Plays Drive Broader Semiconductor Strength

Cramer pointed to strong momentum in data center-related stocks, noting that companies that enable connectivity and infrastructure are benefiting from rising demand.

He specifically said he would buy Lumentum Holdings Inc (NASDAQ:LITE), Arista Networks, Inc (NYSE:ANET), and Astera Labs, Inc (NASDAQ:ALAB), emphasizing their role in helping machines communicate within data centers.

NVIDIA, ARM, and AI Leaders Remain Key Rivals

Cramer identified NVIDIA Corp (NASDAQ:NVDA) as a leading player in AI infrastructure, reinforcing its dominance in data centers.

He also highlighted Arm Holdings plc (NASDAQ:ARM) as an important competitor, noting its role in designing chip architectures and producing CPUs.

He framed these companies, alongside AMD, as central beneficiaries of what he described as a “fourth industrial revolution” driven by increasing reliance on computing power.

Technical Analysis

AMD is in a powerful long-term uptrend, up 239.54% over the past 12 months, and it’s holding well above its major moving averages. At $348.40, the stock is trading 19.6% above its 20-day SMA ($290.96) and 64% above its 200-day SMA ($212.29), a kind of separation that often attracts momentum buyers but can also raise the odds of sharper pullbacks.

The trend structure remains constructive with the 20-day SMA above the 50-day SMA, and the longer-term “golden cross” (50-day SMA above the 200-day SMA) that formed in July 2025 still supports the broader bullish regime. With the 52-week high at $362.79 nearby, traders are watching whether the price can push into that prior peak zone or stalls and mean-reverts toward faster averages.

RSI is the cleanest momentum read right now: at 70.07, it’s in overbought territory, signaling the move is getting stretched versus its recent pace. In plain terms, RSI helps gauge whether buying pressure has become crowded; overbought doesn’t mean “must fall,” but it often means upside can get choppier and dips can be sharper if buyers step back.

  • Key Resistance: $362.79 — near the 52-week high zone where sellers previously showed up
  • Key Support: $290.96 — aligns with the 20-day SMA, a common “first pullback” area in strong trends

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the August 4, 2026 (estimated) earnings report.

  • EPS Estimate: $1.39 (Up from 48 cents YoY)
  • Revenue Estimate: $10.49 Billion (Up from $7.68 Billion YoY)
  • Valuation: P/E of 130.9x (Indicates premium valuation relative to peers)

AMD Price Action: Advanced Micro Devices shares were up 1.91% at $348.05 during premarket trading on Tuesday. The stock is approaching its 52-week high of $362.79, according to Benzinga Pro data.

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