Edward Jones initiated coverage on AMD (NASDAQ:) with a “Buy” rating and added the semiconductor giant to its “Stock Focus List” in a note to clients this week.

The company told investors that it sees several catalysts that could lead to disproportionate growth for AMD in the coming years.

One of the main reasons for Edward Jones’ optimistic outlook is the increasing demand for data center infrastructure, which is expected to increase sales of AMD’s graphics processing units (GPUs) and central processing units (CPUs).

The company’s analysts point out that “increasing demand for data center infrastructure should contribute to increasing sales” of these important products.

Another factor contributing to Edward Jones’ optimism is AMD’s acquisition of Xilinx.

“Although the acquisition of Xilinx adds new programmable chip products and end markets to AMD’s business, we believe the company is still in the early stages of cross-selling and integrating Xilinx and AMD products,” the company writes.

The integration of Xilinx’s programmable chip products into AMD’s existing offering is still in its early stages, but significant cross-selling potential between the two companies is expected.

According to Edward Jones management, this opportunity could be worth up to $10 billion, underscoring the strategic value of the acquisition.

In addition, Edward Jones points to the potential for a longer upgrade cycle in the PC market driven by AI-enabled PCs, which could further support AMD’s growth.

The company believes that while the PC market is already beginning to recover, “AI-enabled PCs could lead to longer upgrade cycles,” which would lead to sustainable growth in this segment.

Edward Jones concludes that this positive outlook for AMD “is ​​not fully reflected in the share price,” making the company an attractive investment opportunity at current levels.