TLDR
- Oppenheimer upgraded AMD to Outperform and set a $600 price target.
- AMD rose 1.4% to $455.49 before the opening bell Monday.
- Nvidia fell 5.2% to $176.90 as its board opened a probe tied to CEO Jensen Huang.
- Oppenheimer forecasts 135% data center revenue growth for AMD next year.
- AMD guided for sales growth of 80% or more in 2027.
Advanced Micro Devices stock was moving up Monday while its biggest rival slipped. AMD gained 1.4% to $455.49 before the opening bell.
Advanced Micro Devices, Inc., AMD
Nvidia (NVDA) went the other way, dropping 5.2% to $176.90. Both stocks have had a rough month, down 24% and 17% respectively through Friday’s close.
The lift for AMD followed a Sunday note from Oppenheimer analyst Rick Schafer. He moved the stock to Outperform from Perform and set a $600 price target.
That target is about 34% above Friday’s close of $449.04. AMD jumped 11% in that session, so the stock arrives at Monday with some momentum.
What Oppenheimer Is Counting On
Schafer sees data centers as the engine. He expects that business to grow 135% next year and make up 85% of AMD’s total sales.
His model also includes roughly 3 gigawatts in 2027 and 4 gigawatts in 2028. Those are big numbers, and the whole call leans on them.
He expects OpenAI and Meta to drive growth through the first quarter. Anthropic is expected to ramp up late in that quarter.
Schafer also pointed to spending from Oracle, Microsoft and Saudi Arabia’s Humain. The top five cloud providers are expected to spend about $1.3 trillion on capital expenditures in 2027, up from $800 billion this year.
On the product side, AMD has committed to a one-year chip cadence. That means the MI500 in 2027 and the MI600 in 2028.
Oppenheimer also expects data center GPU sales to pass EPYC server CPU revenue. Even so, the CPU line is projected to more than double next year.
The Earnings Backdrop
Schafer leaned on AMD’s third-quarter report from last week. Revenue came in at $13.38 billion, up 45% from a year ago and $279 million above the top of guidance.
Data Center revenue rose 97% from a year earlier and 27% from the prior quarter. CEO Lisa Su said the company expects sales to grow 80% or more next year.
Other analysts have weighed in too. DA Davidson raised its target to $600 with a Buy rating, StoneX set $685, and TD Cowen kept a Buy at $675.
Not everyone is cheering. HSBC kept a Hold rating with a $540 target, and RBC stayed at Sector Perform with the same $540 target.
Schafer’s note did not touch on Nvidia’s situation. On Sunday, Nvidia’s board said it would independently investigate whether Huang was targeted by a foreign intelligence effort, after a relationship with an executive suspected of working for Chinese intelligence.
Huang apologized in a letter to staff for being unfaithful to his wife. “I support the investigation and will cooperate fully,” he said.
