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Advanced Micro Devices AMD has made a comeback in the last few weeks. Advanced Micro Devices stock still has a long way to go before it reaches its past highs again. It is trading at around $170 a share, but earlier this year at the height of the “AI mania” it was trading above $225.

That said, there is a catalyst at work that could enable the stock to not only return to its previous high, but also reach higher highs in the coming years. We are, of course, talking about the growth trend of AI-PC chips. Playing slowly, it’s not too early to gain exposure by adding these stocks to your portfolio.

Advanced Micro Devices Stock and Its Recent Rise

As we detailed in AMD’s post-earnings report, investors reacted negatively to the company’s April 30 quarterly earnings release. The results themselves exceeded sell-side forecasts. However, AMD’s guidance updates have caused major disappointment.

Namely, guidance on estimated sales of MI300 Instinct series AI accelerator chips in 2024.

However, while investors were overvaluing Advanced Micro Devices stock before and immediately after the earnings release, it’s possible that the earnings release of another top AI chip competitor helped fuel AMD’s recent rebound.

It’s clear that the strong results and guidance from top competitor Advanced Micro Devices are helping to boost confidence in AMD’s future growth potential. On the other hand, it may not be the only factor causing the rebound of this mega-cap tech company that got stuck in the crisis.

Another possible factor is the anticipated upcoming increase in demand for chips needed to power desktop computers and other consumer devices that support generative artificial intelligence. Again, AI-PCs will take some time to emerge. Still, once it comes to fruition, it could have a dramatically positive impact on the operational performance of advanced microdevices.

AI-PC chip sales could be groundbreaking

Despite last month’s disappointment, sales of the Instinct MI300 could have a major impact on Advanced Micro Devices’ performance in the future. AMD’s latest guidance projects this new product line to generate $4 billion in revenue this year. As the demand for AI chips for data centers continues to grow, further growth is very possible in 2025 and beyond.

But starting in 2025, it’s AI-PC chips that could really move the needle for Advanced Micro Devices stocks. AMD is a pioneer in this space. Earlier this year, it was announced that the company had a 90% share of this still small but rapidly growing AI processor market.

Over time, you can expect your competitors to gain an advantage. However, any loss of market share will be greatly outweighed by the extent of AI-PC proliferation. According to Morgan Stanley, next year alone the percentage of AI-enabled PCs in the overall PC market will increase eightfold, from 2% to 16%.

This likely means billions in additional incremental revenue for AMD, lending credence to sell-side forecasts that the company’s sales will grow by as much as 59.9% in 2025. The earnings impact of AI-PC chip sales could be even more dramatic.

Bottom line: It’s not too late to start early

If you think the prospect of nearly 60% revenue growth next year is impressive, consider that AMD’s earnings could more than double analyst forecasts for 2024, to $8 per share.

Moreover, it is not as if AI-PC chip sales growth will come to a screeching halt starting in 2026. The aforementioned Morgan Stanley forecast predicts that AI-PC market share will quadruple further between 2025 and 2028, to 64% of the total market PCs. market.

As a result, AMD will likely maintain its rich valuation for a longer period of time. Any big jump in earnings will undoubtedly result in another big jump higher for the stock. While the next big stock price rally may not happen immediately, it’s not too late to get in on the market early. At least keep Advanced Micro Devices stocks on your radar.

Advanced Micro Devices stock earns a B grade on Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace research staff member responsible for this article held (directly or indirectly) any positions in the securities mentioned in this article.