TLDR
- AMD shares advanced 7.7% Wednesday after analysts issued bullish reports on chipmaker’s outlook
- Bernstein lifted price target from $200 to $225 based on AI progress and server strength
- KeyBanc anticipates Q4 earnings beat with Turin server CPUs potentially exhausted for 2026
- Epyc processor sales could jump 30% in 2026 according to analyst projections
- OpenAI partnership set to contribute AI revenue beginning in second half of year
AMD stock rose 7.7% Wednesday to close at $249.76 following positive analyst commentary. Two Wall Street firms highlighted the chipmaker’s server business strength ahead of its Feb. 3 earnings announcement.
Advanced Micro Devices, Inc., AMD
Stacy Rasgon at Bernstein increased his price target to $225 from $200. His Market Perform rating remained unchanged.
Rasgon noted progress in AMD’s artificial intelligence business. OpenAI stands as the only major customer publicly confirmed for AMD’s Helios chip line.
The analyst sees the OpenAI ramp starting later in 2026. This timing reduces short-term pressure on AMD’s AI performance.
Core server operations should benefit from data center strength and market share growth. These tailwinds could support the stock while AI business develops.
AMD’s valuation sits at 35 times forward earnings. The multiple exceeds Nvidia by 10 turns, reflecting investor optimism about AI prospects.
Data Center Supply Running Tight
John Vinh at KeyBanc expects AMD to top Wall Street estimates for the fourth quarter. His confidence stems from robust Turin CPU demand in data centers.
Vinh believes AMD may have already sold its complete 2026 server processor inventory. Limited supply could allow the company to raise prices by 15%.
Cloud computing providers are competing for chip allocations. The competitive environment gives AMD pricing leverage it hasn’t enjoyed recently.
Investor skepticism remains about AMD’s GPU competitiveness versus Nvidia. Vinh anticipates management will address these doubts during the earnings call.
Customer win announcements and production schedules could reduce concerns. The market seeks evidence of AMD gaining traction in AI GPU deployments.
Growth Projections Climb
Rasgon forecasts 30% sales growth for AMD’s Epyc processor family in 2026. The server chips represent AMD’s flagship data center product.
The OpenAI partnership should start generating AI chip revenue this year. Rasgon expects these sales to materialize in the second half.
AMD delivered 32% revenue growth in the trailing twelve months. Analysts model similar expansion rates for the current year.
Earnings Catalyst Approaching
Fourth-quarter results arrive on Feb. 3. Investors will parse management comments on server demand trends and AI customer pipeline.
AMD appointed KC McClure to its board recently. McClure served as CFO and senior advisor at Accenture before joining.
Riot Platforms finalized a ten-year data center services deal with AMD. The Texas facility agreement starts with 25 MW of infrastructure with room to scale to 200 MW from January 2026.
Wells Fargo maintains its Overweight stance with a $345 target price. The firm emphasizes AI opportunity as a primary investment thesis.
Goldman Sachs favors Broadcom and Nvidia in the compute space. The bank pointed to their AI capital expenditure positioning and networking advances.
AMD’s price target range from Wall Street analysts spans from $210 to $380. The stock trades near the midpoint of that range.
Bernstein’s updated target of $225 sits below the current trading price. The firm acknowledges AI potential while maintaining a cautious stance on valuation.
