Advanced Micro Devices (NASDAQ:AMD) ended the week on a high note, jumping 6% on Friday after closing its largest-ever investment-grade debt offering and receiving an upbeat long-term outlook from Bank of America.

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AMD raised $4.75 billion through four bond tranches, with strong institutional demand allowing the company to price its longest-dated debt more favorably than initially expected. The funds give AMD additional financial flexibility to invest in its rapidly expanding AI hardware business and capital spending.

Meanwhile, Bank of America raised its 2030 server-CPU market forecast to more than $210 billion and named AMD a top pick. The bank argued that the growth of agentic AI will help make CPUs more important as the control layer in data centers, potentially shifting infrastructure away from a GPU-dominated model toward a more balanced CPU-GPU mix.

The gains added further sheen to a stock that is now up by 140% year-to-date, although its valuation looks quite demanding. AMD trades at roughly 31x 15-month forward earnings, compared with a 24x sector median.

However, while top investor The J Thesis (JT) concedesthat the stock is no longer a cheap way to gain exposure to AI, JT keeps a bullish stance on AMD.

It’s true the valuation has moved higher alongside the share price, but JT believes the premium remains reasonable given the company’s growth prospects, strong execution, and position in the AI ecosystem. For JT, the key question is not whether AMD is expensive in absolute terms, but whether its earnings growth can justify the valuation. At this stage, JT believes it can.

AMD’s recent performance provides much of the support for that view. Data center demand remains particularly strong, with revenue from the segment more than doubling year over year to $6.7 billion in the latest quarter. The business accounted for the majority of AMD’s total revenue, highlighting the company’s growing role in AI infrastructure. JT also points to AMD’s ability to combine rapid growth with strong profitability. Revenue increased 50% YoY, while its non-GAAP gross margin reached 56%, suggesting robust demand and meaningful pricing power.

The company is also strengthening its position for the next phase of AI growth. Its acquisition of Taalas is aimed at improving compute efficiency and AI inference capabilities, while partnerships with major technology companies such as Anthropic and Microsoft reinforce AMD’s role in the expanding AI ecosystem. JT sees these relationships as important components of AMD’s long-term competitive position and believes the company remains exposed to several attractive growth markets, including AI, data centers, and cloud computing.

JT also believes the valuation should be viewed alongside AMD’s exceptional financial performance. The company has delivered substantial revenue and earnings growth over the past year, while maintaining a solid balance sheet and healthy profitability. Although the stock commands a premium valuation, JT argues that strong earnings growth can make that premium more reasonable if the current trajectory continues. Longer term, sustained double-digit growth could allow AMD’s valuation to become less demanding as earnings catch up with the share price.

Nevertheless, there are still meaningful risks. AMD remains heavily tied to the AI investment cycle, and any deterioration in AI sentiment could pressure both the stock and its valuation. Weakness in the client and gaming business, margin compression, competition from Nvidia, and broader macroeconomic uncertainty are additional concerns.

“But that’s not my base case,” the 5-star investor summed up. “Now, my view here remains that Advanced Micro Devices successfully rides the AI-powered wave. And, quite frankly, I don’t see why it should change anytime soon. Its top and bottom-line growth remains outstanding, and this simply makes me bullish.”

Accordingly, The J Thesis rates the stock a Buy. (To watch The J Thesis’s track record, click here)

Most Street analysts agree. Based on 27 Buys vs. 6 Holds, the stock claims a Strong Buy consensus rating. The forecast calls for 12-month returns of 26%, considering the average target clocks in at $647.04. (See AMD stock forecast)