AMD Stock Gains After Upgrade: Analyst Sees ‘Strongest Combination’ Of Earnings Leverage, Data Center Gains

Raymond James upgraded AMD stock to ‘Strong Buy’ from ‘Outperform’ and raised the price target to $641 from $565.

• Raymond James expects AMD's server CPU revenue to grow at a 44% compound annual growth rate through 2030.
• BMO Capital recently said AMD is on the “verge of becoming a complete AI infrastructure provider.”
• It sees AMD’s Helios AI rack helping the company gain share against Nvidia.

Advanced Micro Devices (AMD) shares gained in pre-market trade on Tuesday after an upgrade by Raymond James, which sees AMD continuing to take share in data center compute.

In a note to investors cited by TheFly, the firm called AMD “the strongest combination of direct earnings leverage, data center positioning and market-share gains,” with server CPU revenue projected to grow at 44% CAGR through 2030. 

It upgraded AMD stock to ‘Strong Buy’ from ‘Outperform’ and raised the price target to $641 from $565. From Monday’s close of around $456, Raymond James’ price target implies a potential upside of over 40%. AMD stock gained more than 3% in pre-market trading amid broader market strength. 

How Is The Rest Of Wall Street Feeling About AMD?

Raymond James is not alone in taking a bullish view of AMD. Koyfin data showed the 12-month average price target for AMD at around $612.29, implying roughly 34% upside from Monday's close. The highest target among analysts stands at about $1,250, more than double the stock's current level. 

Of the 54 analysts covering AMD, 44 have a ‘Buy’ or ‘Strong Buy’ rating, while 10 rate the stock ‘Hold.’

BMO Capital also initiated coverage of AMD last week with an ‘Outperform’ rating and a $550 price target. The firm said AMD is on the “verge of becoming a complete AI infrastructure provider.”

BMO pointed to AMD's Helios AI rack as a key part of that opportunity, describing it as the company's closest competitive offering to Nvidia's (NVDA) AI infrastructure. The firm expects AMD to capture additional share of the growing AI infrastructure market.

How Is Retail Feeling About AMD Stock?

Despite the positive analyst calls, retail sentiment around AMD remained in ‘bearish’ territory on Stocktwits over the past day.

One retail trader said AMD could move higher if earnings from Micron Technology (MU) or Nvidia provide a positive read-through for the chip sector.

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Another trader pointed to Nvidia's earnings as a potential catalyst for AMD, Apple (AAPL), Microsoft (MSFT), and the broader market.

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AMD shares have gained more than 170% in the last 12 months and more than 110% this year. 

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