Advanced Micro Devices (AMD) stock surged on Thursday after its latest earnings report revealed an ongoing collaboration with Microsoft to develop system-on-a-chip (SoC) technology for Xbox devices, including the next-generation console and handheld gaming PCs. This news has investors excited about potential expansion into the gaming PC market.
The partnership is part of AMD’s established role in powering Sony’s PlayStation devices. Analysts have given AMD a Moderate Buy rating, with an average stock price target of $161.16, representing a 6.12% downside for shares. Despite yesterday’s earnings report taking some wind out of its sails, today’s movement suggests the chip company can recoup lost ground.
AMD has already confirmed involvement in Microsoft’s ROG Xbox Ally X, a handheld gaming PC set to release later this year. The potential collaboration on other devices raises questions about whether Xbox plans to enter the pre-built gaming PC market. However, with a focus on its Game Pass subscription service and releasing games across multiple platforms, Xbox may instead aim to make any device an Xbox.
As of Thursday morning, AMD stock was up 5.24%, extending a 42.12% year-to-date rally. Shares have climbed 19.66% over the past 12 months, as analysts continue to monitor the chip company’s prospects.
Source: https://www.tipranks.com/news/amd-stock-rallies-on-plans-to-power-microsofts-xbox-devices