TLDR
- BMO Capital started AMD coverage with an Outperform rating and a $550 price target
- AMD’s Helios rack-scale AI platform is set to begin shipments in September
- AMD reported Q2 revenue of $11.54 billion, up 50% year over year, beating estimates
- OpenAI, Meta and Anthropic are among committed customers for Helios deployments
- AMD stock trades at a P/E ratio above 120, with a consensus Wall Street target of $546.95
AMD stock opened at $473.25 on Monday, sitting below its one-year high of $584.73, as Wall Street continues to debate whether the chip maker can close the gap on Nvidia in the AI infrastructure race.
Advanced Micro Devices, Inc., AMD
BMO Capital kicked off coverage of AMD with an Outperform rating and a $550 price target. Analyst Harsh Kumar framed the call around AMD’s evolution from a processor company into a broader AI infrastructure provider.
The centerpiece of that argument is Helios, AMD’s rack-scale AI platform. BMO sees it as a direct rival to Nvidia’s comparable systems, and shipments are expected to begin in September.
AMD has already locked in customer commitments from OpenAI, Meta and Anthropic. BMO views those relationships as a foundation for growing AI infrastructure revenue as deployments scale up.
Strong Earnings Add to the Bullish Case
AMD’s most recent quarter gave the bulls plenty to work with. The company posted revenue of $11.54 billion, up 50.1% year over year, and earnings of $1.66 per share, beating the consensus estimate of $1.62.
For context, AMD posted just $0.48 EPS in the same quarter a year ago. Analysts now expect full-year earnings of $6.44 per share.
Institutional investors have been paying attention. Tocqueville Asset Management raised its AMD position by 501.5% in the second quarter, adding 8,169 shares to bring its total to 9,798 shares valued at around $5.7 million.
Overall, 71.34% of AMD stock is held by institutional investors and hedge funds. Several smaller firms also opened new positions in the second quarter.
On the analyst front, price targets range widely. Cantor Fitzgerald has the most bullish view at $700, while Melius Research sits at $660 and Mizuho recently raised its target to $625. The consensus across 46 analysts sits at a “Moderate Buy” with an average target of $546.95.
Risks Still on the Table
It is not all green lights. AMD trades at a P/E ratio above 121, which leaves the stock exposed if AI growth disappoints or investor sentiment shifts.
Nvidia remains the dominant player, and AMD is still losing some high-profile deals. SpaceX recently selected Nvidia’s Vera Rubin platform, a reminder that AMD has ground to make up in certain corners of the market.
Google’s expanding custom chip program, including work with Marvell, adds another layer of competition for AI inference workloads. Reports of a potential AMD collaboration with Google on a next-generation TPU could offset some of that pressure if confirmed.
There was also some insider selling to note. CEO Lisa Su sold 125,000 shares in June at an average price of $460.69. SVP Ava Hahn sold roughly 2,993 shares on August 18th at $488.69 per share. Both transactions were executed under pre-arranged Rule 10b5-1 plans.
AMD’s fifty-day moving average stands at $511.40. The stock has a one-year low of $149.22 and a one-year high of $584.73, giving a sense of how far it has come and how much room remains to its more bullish price targets.
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