AMD wins major analyst upgrades as agentic AI drives server CPU revenue surge to new heights

AMD gets a big upgrade from Goldman Sachs following a blowout earnings report

Advanced Micro Devices has considerable room to run over the next year, largely due to structural agentic artificial intelligence tailwinds following a strong first-quarter report, according to Goldman Sachs. The investment bank upgraded the chipmaker name to buy from hold. It also hiked its price target on shares to $450 from $240, implying 27% upside from Tuesday's close. AMD shares rallied 18% after the company posted first-quarter results that beat analyst expectations. Second-quarter revenue guidance was also well above estimates. AMD 5D mountain AMD rallies "We expect proliferation of agentic AI in enterprise and consumer workloads to act as a medium-term tailwind to the server central processing unit (CPU) [total addressable market], benefiting AMD," analyst James Schneider said Tuesday in a note to clients. "AMD presents a compelling opportunity for exposure to agentic AI adoption via server CPUs." Agentic AI refers to a set of AI-powered tools that can function as assistants in a variety of tasks, interacting with various applications without human supervision. The analyst added that a shift toward "more inference workloads" due to booming demand for AI data centers should increase orders of the company's CPUs. Chips with x86, much like those produced by AMD, are likely to get a boost from a rise in enterprise AI agents, he added. Goldman Sachs thinks that AMD will rake in server CPU revenue of $21.1 billion by the end of 2027, or 24% above the consensus estimate on the Street. Most analysts are bullish on AMD. Of the 52 covering the stock, 39 have a buy or strong buy rating, LSEG data shows.

Baird raises AMD stock price target to $625 on AI server growth By Investing.com

Investing.com - Baird raised its price target on Advanced Micro Devices stock (NASDAQ:AMD) to $625 from $300 while maintaining an Outperform rating. The stock has surged 260% over the past year to $355.26, trading near its 52-week high of $362.79. According to InvestingPro data, 10 analysts have revised their earnings upwards for the upcoming period, reflecting growing confidence in AMD's AI-driven growth trajectory. AMD now expects the server CPU total addressable market to exceed a 35% three-to-five-year compound annual growth rate, up from a prior forecast of 18% CAGR, reaching $120 billion by 2030. The increase is primarily driven by agentic AI workloads. Server CPU revenue is expected to grow over 70% year-over-year in the second quarter. AMD's Venice processor remains on track to launch in the second half of the year, along with Verano, a purpose-built CPU for AI infrastructure. Demand for the Mi450 ahead of launch is exceeding management's initial expectations with lead customers, along with an increasing number of new customers. AMD expects PC shipments to be lower in the second half versus the first half due to memory pricing, but still grow year-over-year driven by ongoing market share gains. Gross margin increase is driven by strength in server CPU shipments. Management expects continued positive gross margin dynamics offsetting an initially dilutive ramp of Mi450. While AMD's momentum is undeniable, InvestingPro analysis suggests the stock currently trades above its Fair Value. For investors seeking deeper insights, InvestingPro offers 21 additional exclusive tips and comprehensive financial metrics to help navigate AMD's valuation. In other recent news, Advanced Micro Devices Inc. (AMD) reported first and second-quarter revenue and earnings per share that exceeded expectations, driven by strong performance in server CPU and GPU sectors. Wolfe Research, BofA Securities, and Evercore ISI raised their price targets for AMD to $450, $450, and $579, respectively, all maintaining favorable ratings. RBC Capital also increased its price target to $400, noting robust server CPU revenue with significant year-over-year growth. Goldman Sachs upgraded AMD to a Buy rating, raising its price target to $450 due to anticipated benefits from agentic AI adoption and datacenter GPU growth. The analysts highlighted AMD's competitive positioning in the AI market, with potential for market share growth in the coming years. Evercore ISI emphasized AMD's March quarter earnings per share, which were 6% above consensus, and projected June quarter results to exceed expectations by 10%. Goldman Sachs expects AMD to benefit significantly from the proliferation of agentic AI in enterprise and consumer workloads. These developments indicate positive momentum for AMD's growth prospects, as noted by various analyst firms. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.