TLDR
- Piper Sandler initiated AMD coverage with an Overweight rating and a $600 price target
- AMD currently trades around $521, with a market cap of $850.67 billion
- Agentic AI is seen as a major demand driver for AMD’s CPU server chips
- AMD’s GPU Helios product has signed anchor clients including OpenAI, Meta, and Anthropic
- Piper Sandler projects 50% revenue CAGR and 65% EPS CAGR from fiscal 2026 to 2030
Advanced Micro Devices (AMD) got a fresh vote of confidence on Wednesday as Piper Sandler initiated coverage with an Overweight rating and a $600 price target, implying around 15% upside from AMD’s current price of $521.10.
Advanced Micro Devices, Inc., AMD
Analyst David O’Connor authored the initiation, pointing to agentic AI as a key demand driver for CPU server chips, an area where AMD is actively taking market share.
AMD’s stock had already moved higher on Wednesday, closing up 3.04% after CFO Jean Hu said the company could see a market opportunity of $2 to $3 trillion by the end of the decade.
Piper Sandler is not alone in its bullish view. Citi analyst Atif Malik maintained a Buy rating with a $575 target, while Raymond James upgraded AMD to Strong Buy with a $641 price target, citing a 44% projected revenue growth rate in the server CPU market by 2030.
CLSA raised its AMD price target to $710, maintaining an Outperform rating, and lifted its EPS estimates for fiscal years 2027 and 2028 by 25% to 29%. BMO Capital also initiated coverage with an Outperform rating and a $550 target.
AMD’s AI Ambitions
Unlike generative AI, which leans heavily on GPU power, agentic AI is more CPU-dependent. That shift could be a meaningful tailwind for AMD, which has historically been a CPU powerhouse.
On the GPU side, AMD is ramping its Helios product and has already secured anchor clients, including OpenAI, Meta, and Anthropic. AMD has also claimed its recent AI chips can outperform Nvidia’s (NVDA) offerings, though that remains to be seen at scale.
Piper Sandler projects AMD’s revenues will grow at a 50% compound annual growth rate from fiscal 2026 through 2030. EPS is forecast to grow at a 65% CAGR over the same period, reaching $53 in earnings power by 2030.
The $600 price target is based on a fiscal 2028 estimated price-to-earnings multiple of 24 times. Currently, AMD trades at a P/E ratio of around 133, which is elevated compared to its five-year median.
Valuation Concerns Remain
Not everyone is fully on board. GuruFocus’s GF Value model pegs AMD’s intrinsic value at $279.15, putting the stock at an 81% premium to that estimate. The platform’s GF Score of 81 out of 100 reflects strong growth and financial strength, but a valuation rank of just 1 out of 10.
Insider activity has also leaned negative, with $112.8 million in insider sells over the past three months. Of 27 institutional gurus tracked, 14 trimmed their positions recently.
InvestingPro lists AMD on its Most Overvalued screen, even as 27 analysts have revised earnings estimates upward for the upcoming period.
AMD’s next major catalyst will be its upcoming earnings report, where Wall Street will be watching closely to see if the AI-driven growth story holds up under the numbers.
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