Bank of America Merrill Lynch is getting more bullish on AMD shares, even after the stock's stunning performance this year.

The firm raised its price target to $35 from $25 for Advanced Micro Devices, citing the chipmaker's process manufacturing advantage over Intel. The new price target is 25 percent higher than Tuesday's closing price and is the highest target of the 24 analysts who cover AMD on Wall Street, according to FactSet. Bank of America also reiterated its buy rating for the chipmaker.

"AMD's accretive share gains could extend given main rival's Intel's manufacturing challenges," analyst Vivek Arya said in a note to clients Tuesday. "We anticipate continued positive news flow around customer traction (engaged with all top 7 cloud providers, only announced 3 thus far); and around the pipeline."