BofA Upgrades AMD to Buy, $120 Price Target

BofA Securities analyst Vivek Arya upgraded AMD (NASDAQ: AMD) from Neutral to Buy with a price target of $120 (from $105).

“AMD’s Q1 beat and strong Q2 sales outlook ($7.4bn sales, 10% above our forecast, despite $700mn China headwind) addresses our pre-call concerns re China AI restriction headwinds and NVDA GPU competition.

We find risk-reward compelling and upgrade AMD to Buy on: 1) potential to deliver 20%+ topline growth in CY25E and CY26E, despite China headwinds, 2) continued share gains in PC/server CPU against INTC who remains in perennial restricting mode, 3) meetable/beatable targets for AI GPU sales ($6.2bn for CY25E, up 23% YoY, incl. $1.5bn China restriction headwind) with 2H acceleration on new MI350 product launch; and 4) EBIT margin upside towards 30% in CY27E vs 22% in CY25E, and 5) compelling valuation at 18x CY26E PE vs.

27% CY24-27E pf-EPS CAGR.

Bears will likely point to near-term beats coming from consumer PC/gaming, perhaps from tariff pull-ins, but we believe the beats are more from better mix (more ASP than units) and share gains.

Overall, we raise our CY25/26/27E pf-EPS by 4%/6%/11% to $3.80/$5.60/$6.81 and raise our PO to $120 from $105 on slightly higher 21x CY26E PE vs.

20x prior on stronger earnings but still within 13x-39x historical range.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.