Benchmark Keeps Buy on AMD, $325 Price Target

Benchmark analyst Cody Acree reiterated a Buy rating and $325 price target on AMD (NASDAQ: AMD).

“Yesterday, AMD hosted its first analyst day in three years, where, driven by the insatiable growth of AI demand, the company doubled its estimated data center TAM, offered aggressive corporate and segment revenue growth and increasing market share estimates and provided an encouraging long-term financial model with solid margin improvements and an earnings per share estimate of >$20, which is well above all prior Street forecasts.

With AMD’s shares up strongly after hours, increasing by about $14 or 6%, we believe the market’s reaction is indicative of the company’s rapidly growing leverage to the aggressively expanding AI Data Center market across both its traditional server CPU portfolio and its increasingly competitive AI GPUs, which is exemplified by a significant number of recent marquee partner announcements who are committing to use AMD GPUs and its planned 2026 rack scale server platform.

We believe the company’s roadmap is gaining material traction with a growing customer base that is aggressively demanding increasing volumes of high-performance compute resources for both their training and rapidly expanding inference workloads, who are eager for a viable alternative to Nvidia’s dominant, but proprietary and closed architecture, particularly given the incumbent’s ongoing challenges to fully satisfy the market’s ever-increasing demand.

The proof points of AMD’s improved competitive positioning can be seen in its recent agreements with OpenAI for 6GW of capacity, Oracle for 50,000 MI450s, Meta who co-defined Helios, the US Department of Energy’s two new supercomputers, multiple Sovereign AI projects, and a number of engagements with leading Hyperscalers.

With most of these planning major deployments beginning in the second half of next year.

In aggregate, the company believes it is well on its way toward achieving its goal of earning tens of billions of annual AI revenue in 2027 and >$100 billion of Data Center revenue over the next 3-5 years, with the OpenAI partnership alone said to represent well over $100 billion of revenue potential over the next few years.”

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