AMD (AMD) Stock: Xbox Partnership Fuels Rally Ahead of Key Event

TLDR

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AMD stock jumped 4.77% on Monday after announcing new Ryzen gaming chips for Microsoft’s handheld Xbox consoles
The new Ryzen AI Z2 Extreme and Ryzen Z2 A processors will power upcoming Xbox handheld devices launching in 2025
AMD has gained 55% over the past two months after hitting a 52-week low in April
Top investor JR Research recommends loading up on AMD shares ahead of the company’s Advancing AI Day on June 12
Wall Street maintains a Moderate Buy rating with an average price target of $127.24, representing 5.1% upside potential

AMD stock climbed 4.77% on Monday following the chipmaker’s announcement of new gaming processors designed for Microsoft’s handheld Xbox consoles. The company unveiled the Ryzen AI Z2 Extreme and Ryzen Z2 A chips, which will power the upcoming ROG Xbox Ally X and ROG Xbox Ally devices.

The Ryzen AI Z2 Extreme features a dedicated Neural Processing Unit that integrates with Microsoft’s Copilot+ AI technology. This marks AMD’s continued push into the portable gaming market, where demand for powerful yet efficient processors continues to grow.

These new chips won’t be limited to Microsoft’s Xbox handhelds alone. The processors could appear in other gaming devices, including potential updates to Asus’ ROG Ally line or new products from manufacturers like Lenovo.

Get a first look at the AMD Ryzen Threadripper PRO 9000 Series, purpose-built for creators, engineers, and AI innovators to handle the most demanding multi-threaded workloads and bring complex visions to life faster than ever. pic.twitter.com/sR8GS0Qon0
— AMD Ryzen (@AMDRyzen) June 6, 2025

Microsoft has confirmed that its Asus Xbox handhelds will launch sometime in 2025, though no specific release date has been provided. The company hasn’t disclosed whether other device makers are developing products using these new AMD processors.

Strong Performance Following April Lows

AMD has experienced a remarkable turnaround since hitting its 52-week low in early April. The stock has gained 55% over the past two months, driven by multiple positive catalysts including strong Q1 earnings and a $10 billion partnership with Saudi Arabia’s HUMAIN initiative.

The chipmaker has also benefited from continued commitments by major cloud providers to maintain their AI infrastructure spending. These hyperscalers have affirmed their plans to keep investing heavily in AI capabilities, which directly benefits AMD’s data center business.

However, trade tensions with China continue to present challenges. Export restrictions affecting the Chinese market remain a concern for AMD and other semiconductor companies operating in the region.

Top investor JR Research, ranked among the top 2% of TipRanks’ stock professionals, sees opportunity in AMD’s current position. The five-star investor believes the company’s Q1 results and data center momentum support confidence in its core business operations.

Advancing AI Day Creates Anticipation

AMD’s upcoming Advancing AI Day on June 12 has generated excitement among investors and analysts. The event will showcase the company’s technological progress and developments in its AI software stack.

JR Research views this conference as a key catalyst for the stock. The investor expects AMD to demonstrate its competitive position against industry leader Nvidia, particularly in AI inference applications.

The relatively low market expectations could work in AMD’s favor during the presentation. JR Research notes that AMD is still underperforming compared to other semiconductor stocks, which reduces pressure on the company to deliver groundbreaking announcements.

Citi analyst Christopher Danely recently updated his coverage of AMD ahead of the AI event. The five-star analyst maintained a Neutral rating but raised his price target to $120 from $100, though this still implies a slight downside from current levels.

AMD stock was trading up 4.09% as of Monday morning and remains essentially flat for the year with a 0.12% gain year-to-date. The combination of new Xbox chip announcements and anticipation for the AI event provided positive momentum for the shares.

Wall Street analysts maintain a Moderate Buy consensus rating on AMD based on 22 Buy ratings and 10 Hold ratings issued over the past three months. The average price target of $127.24 suggests potential upside of approximately 5.1% from current trading levels.

The stock closed Monday’s session with investors positioning ahead of this week’s AI Day presentation and the potential for additional product announcements.

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