Key Takeaways
- Wells Fargo elevated AMD’s price target from $505 to $615 while maintaining its Overweight rating.
- AMD shares ended Monday’s session up 3.4% at $539.49, with the revised target suggesting 14% potential upside.
- Wells Fargo analyst Aaron Rakers projects AMD’s server CPU revenue will surge 68% to reach $16 billion in 2026.
- The firm anticipates data center GPU revenue hitting $63 billion by 2028.
- AMD may achieve $20 in annual EPS ahead of the company’s own timeline, according to Wells Fargo.
Advanced Micro Devices (AMD) shares finished Monday’s trading session at $539.49, gaining 3.4%, and extended gains by an additional 0.5% during premarket hours Tuesday. The upward momentum followed Wells Fargo’s decision to boost its price objective on the semiconductor manufacturer from $505 to $615.
Advanced Micro Devices, Inc., AMD
The updated price objective represents approximately 14% potential appreciation from Monday’s closing price. Analyst Aaron Rakers maintained his Overweight stance on the stock.
Rakers brings significant credibility to his semiconductor coverage. He holds the #8 position among more than 12,000 analysts monitored by TipRanks, boasting a 73% accuracy rate.
His optimistic outlook centers on a straightforward thesis: agentic AI applications are consuming massive amounts of computing power, and AMD’s processors are positioned to capitalize on this trend.
Data Center Processors Driving Growth Engine
Rakers forecasts AMD’s server CPU division will generate $16 billion in revenue during 2026—representing a remarkable 68% increase from current levels.
The momentum doesn’t stop there. His projections call for $20.5 billion in 2027, followed by $25 billion in 2028.
Cloud service providers continue expanding AI infrastructure. Meanwhile, enterprises are upgrading their data center capabilities, driving increased adoption of AMD’s high-core-count EPYC processor lineup.
Rakers also highlighted favorable pricing dynamics. As customers select more advanced EPYC configurations, AMD captures improved profit margins on these transactions.
Graphics Processing Units Enhance Revenue Outlook
The revenue story extends beyond processors alone. Rakers maintained AI GPU revenue projections that exceed Wall Street consensus estimates.
He forecasts $15.6 billion in data center GPU sales for 2026. Those figures escalate to $40.6 billion in 2027 and $63 billion by 2028.
When combined with CPU expansion, these projections prompted Rakers to raise his earnings forecasts. He now anticipates $13.40 per share in 2027 and $18.75 in 2028.
These estimates reinforce his view that AMD could surpass $20 in annual EPS before the company’s own projected timeline.
Product development momentum adds another supportive element. AMD’s upcoming 2nm EPYC Venice processors entered production during late May.
High-volume shipments are anticipated throughout the second half of 2026. AMD has indicated that customer validation and production ramp for Venice are progressing faster than any previous EPYC generation.
However, not all analysts share this level of optimism. The broader Wall Street consensus rating for AMD stands at Strong Buy, constructed from 28 Buy recommendations and seven Hold ratings issued over the past three months.
The consensus average price target sits at $507.18. This figure actually trails AMD’s current market price, implying approximately 6% potential downside rather than gains.
Clearly, Wall Street remains divided on how much further this rally can extend. Wells Fargo has now positioned itself among the most bullish voices in the analyst community.
