TLDR
- AMD stock jumped as much as 18.8% in premarket trading following a strong Q1 earnings beat.
- Seaport Global upgraded AMD to buy with a $430 price target; the stock was trading at $355.26 before the move.
- AMD secured better-than-expected manufacturing capacity from TSMC, a key factor in the upgrade.
- Server CPU demand is accelerating, with Baird projecting a 35%+ CAGR for the server CPU market through 2030.
- AMD’s GPU business remains a watch-and-wait story, with the MI455 rack-scale launch expected in H2.
AMD stock is soaring after the company posted earnings that beat expectations across the board, with premarket gains touching 18.8%. If those gains hold through the close, it would mark the stock’s best post-earnings day since January 2019.
Advanced Micro Devices, Inc., AMD
The stock was trading around $355.26 going into the report, up 260% over the past year. Multiple analysts have since raised their price targets.
Seaport Global Securities moved fastest, upgrading AMD from neutral to buy and setting a $430 price target. Analyst Jay Goldberg said Intel’s recent results should have been the signal. “In hindsight, Intel’s results were a very clear signal that AMD’s business was picking up,” he wrote.
The upgrade wasn’t just about the headline numbers.
AMD disclosed that it locked in better-than-expected manufacturing allocation from Taiwan Semiconductor Manufacturing Company. In a market where chip demand is running hot, access to capacity is what separates companies that can capitalize from those that can’t.
“Our guiding thesis is that companies with access to capacity will outperform as demand ripples across the industry,” Goldberg wrote.
Bernstein’s Stacy Rasgon also turned bullish after the report. His model has AMD generating more than $14 in adjusted EPS in 2027, climbing toward $20 by 2028. The FactSet consensus sits well below those numbers, at under $12 and $16 respectively.
Server CPU Demand Is the Story Right Now
Near-term momentum is being driven by surging server CPU demand. Baird raised its price target to $625 and projects a compound annual growth rate of over 35% for the server CPU market through 2030, fueled by AI workloads.
Wolfe Research and BofA Securities both set targets at $450. RBC Capital moved its target to $400, citing strong server CPU revenue and a positive forward outlook. Northland set its target at $320.
Ten analysts revised their earnings estimates upward for the upcoming period, according to InvestingPro data.
Goldberg had previously been waiting on AMD’s MI450 GPU ramp before turning positive. But he acknowledged that CPU demand has “pulled up the timeline considerably.”
GPU Business Still a Wait-and-See
Not everyone is fully on board. Morgan Stanley’s Joseph Moore, who carries an equal-weight rating, noted that AMD’s GPU business remains “in a holding pattern” ahead of the MI455 rack-scale launch later this year.
“What matters is the rack-scale launch in the second half, which we continue to view as a show-me story given inconclusive customer feedback thus far,” Moore wrote.
Jefferies analyst Blayne Curtis, who rates AMD at buy, agreed that “GPU execution in the back half remains the key swing factor.”
AMD’s management said early feedback on the MI455 gives the company visibility into a larger opportunity, but offered no specific second-half guidance.
Rasgon’s price targets and Moore’s cautious stance reflect a market that’s largely sold on the CPU side of the story, while the GPU chapter is still being written.
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