Shares of Advanced Micro Devices, Inc. (NASDAQ: AMD ) have been under heavy selling pressure of late, falling almost 14% from $14.16 on April 5 to last week’s low of $12.22. The reason? Goldman Sachs analyst Toshiya Hari, downgraded AMD stock to “Sell” with a $11 price target.

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AMD shares closed Friday at $12.31, suggesting there’s possible downside of almost 11%. Despite acknowledging the strong execution AMD has delivered under CEO Lisa Su, Hari noted strong competitive threats from the likes of Intel Corporation (NASDAQ: INTC ) and Nvidia Corporation (NASDAQ: NVDA ).

All told, the analyst — who expects AMD to earn just 2 cents per share in fiscal 2017 (versus consensus of 8 cents) — believes any good news about Advanced Micro Devices is already priced into the shares.

But that’s where he’s wrong.

I expect AMD stock, which has fallen 12% in thirty days, to reach $16 in 2017, delivering 30% gains on the back of greater GPU adoption and rising profit margins.

The Bull Case for AMD Stock

The Sunnyvale, Calif.-based chip company, which has come back by almost 400% over the past two years to prove doubters wrong, is set to report first quarter fiscal 2017 earnings results in a couple of weeks. For the quarter that ended March, Wall Street expects the company to report a loss of 4 cents per share on revenues of $984.38 million. This compares to the year-ago quarter when the company lost 12 cents per share on $832 million in revenue.

For the full year ending in December, AMD is expected to earn 8 cents per share, versus a loss of 14 cents a year ago, while full-year revenue of $4.74 billion would mark an increased of the 10.9% year-over-year. The significant fiscal year expected improvements — particularly in EPS — presents an opportunity for both investors and traders take advantage of the recent pullback in AMD stock, caused strictly by Goldman’s downgrade.

Not only does AMD continue to benefited from strong growth in its popular Radeon line of GPUs (Graphics Processing Unit), there are also signs that the declines in PC sales have begun to stabilize.

And thanks to the company’s recent partnership with Alphabet Inc (NASDAQ: GOOGL ), where its FirePro server GPUs will power Alphabet’s cloud platform in 2017, AMD’s revenue growth should accelerate in the quarters ahead.

Bottom Line

With AMD stock skyrocketing some 355% over the past year, it’s understandable to question how much more runway is left for the stock to fly, which seems to be the basis for Goldman’s downgrade.

But with Advanced Micro’s GPU strength still gaining traction, combined with recent bets on VR/AR, AMD stock should be owned, not sold.

As of this writing, Richard Saintvilus did not hold a position in any of the aforementioned securities.