Why Advanced Micro Devices Stock Just Bounced Back

Yahoo Finance ·

Advanced Micro Devices ( AMD +9.84% ) stock jumped 8.3% through 10 a.m. ET Monday, but the catalyst that sparked the move looks rather tenuous. As StreetInsider.com reports today, Goldman Sachs analyst James Schneider raised his price target on AMD stock to $640 this morning, and that's really all the detail anyone has on the raise -- that it happened. AMD stock sold off hard at the end of last week, falling nearly 11% from Tuesday's all-time high to Thursday's close. Goldman hasn't lost faith in the semiconductor stock , however, instead taking advantage of last week's sell-off to quietly raise its price target on AMD. (Goldman had previously recommended buying AMD despite valuing it at only $450 -- a price much less than it's been trading at for weeks.) Now, with AMD trading below $570 but Goldman saying it's worth $640, the "buy" rating makes more sense. And yet, in the absence of more detail about why Goldman thinks AMD stock is worth so much, investors need to consider carefully before following the advice of one analyst just baldly declaring the stock a "buy."

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