Advanced Micro Devices (AMD) has experienced a significant surge in its stock, rising by nearly 80% this year. This impressive rally has been substantially driven by optimism surrounding AMD’s involvement in the artificial intelligence (AI) chip market. Recent collaborations with leading AI firms have bolstered demand for its products, raising questions about whether AMD stock can maintain this upward trajectory.
AMD’s Recent Developments
A notable development for AMD was its partnership with OpenAI, which indicates strong demand from key players in the AI sector. Oracle also announced plans to deploy 50,000 AMD chips across its cloud centers starting in 2026, further enhancing AMD’s market position.
Analysts’ Positive Outlook
- Analysts on Wall Street are optimistic about AMD’s future.
- Bank of America analyst Vivek Arya assigned a Buy rating after discussions with company executives reinforced a positive outlook.
- Wolfe Research analyst Chris Caso upgraded his rating from Hold to Buy and set a new price target of $300, suggesting a potential upside of 37%.
Both analysts expect significant revenue growth in the coming years, with Caso predicting $15 billion annually from OpenAI and $27 billion in AI-related sales by 2027. This forecast could drive earnings above $10 per share, supporting further stock price appreciation.
Upcoming Earnings Report
AMD is set to release its third-quarter results next month. Analysts anticipate revenues of $8.74 billion, marking a 28% increase compared to the previous year. Additionally, earnings per share are projected to rise by approximately 27% to $1.17.
Market Consensus on AMD Stock
The current consensus on Wall Street is a Strong Buy for AMD, based on 28 Buy ratings and eight Hold ratings. The average price target stands at $244.21, indicating an upside potential of nearly 12% from its current price.
Investors will be closely monitoring AMD’s upcoming earnings call for insights into data center demand and developments in its AI partnerships, which may influence its market outlook in the near future.
