Advanced Micro Devices (AMD) has gained significant attention, particularly following its partnership with OpenAI, the creator of ChatGPT. This collaboration has led several analysts to revise their stock price targets for AMD, reflecting renewed optimism about its future performance in the AI sector.
TD Cowen Analyst Increases AMD Stock Price Target
On Friday, Joshua Buchalter, a top analyst at TD Cowen, raised the price target for AMD stock from $195 to $270. He maintained a “Buy” rating, indicating confidence in the company’s growth potential. According to Buchalter, this adjustment is driven by AMD’s new deal with OpenAI, which addresses previous concerns about the company’s position in the AI market.
Key Highlights of the AMD-OpenAI Partnership
- OpenAI plans to deploy 6 gigawatts of AMD’s Instinct graphics processing units (GPUs) over several years.
- The partnership includes a warrant for up to 160 million shares of AMD, potentially giving OpenAI around a 10% stake in the company.
Buchalter pointed out that while the collaboration wasn’t entirely unexpected, its scale and implications have exceeded initial projections. He acknowledged that this agreement significantly validates AMD’s commitment to the competitive AI landscape, which is currently dominated by rivals such as Nvidia.
Analyst Perspective and Market Sentiment
While Buchalter remains optimistic about AMD’s long-term prospects, he has a neutral stance ahead of the company’s Q3 earnings report. Despite strong fundamentals, he believes the results may not act as a major catalyst for the stock, especially after the ascent following the landmark OpenAI deal.
Updated forecasts suggest that AMD’s earnings per share (EPS) could approach $10 by 2027 under conservative conditions. Buchalter, who ranks 750th among over 10,000 analysts on TipRanks, holds a 60% success rate with an average return of 16.5% per rating.
Market Consensus and Future Outlook
The overall sentiment on Wall Street is a Moderate Buy for AMD stock, based on analyses involving 26 Buy ratings and 10 Holds. The current average price target for AMD is set at $239.15, which indicates a potential upside of approximately 11.3% from current price levels.
As AMD continues to innovate and expand through strategic partnerships, its position in the semiconductor and AI industry appears increasingly robust, capturing the attention of both analysts and investors alike.
