UBS Lowers AMD Price Target to $310
UBS analyst Timothy Arcuri lowered the price target on AMD (NASDAQ: AMD) to $310.00 (from $330.00) while maintaining a Buy rating.
“The stock has been outperforming peers like NVDA/AVGO this year as investors have been hoping that server strength would drive some upside EPS revisions.
Numerically, this seems unlikely to really happen coming off this call as server CPU strength is being largely offset by ~$1B cut to the gaming business for this year (see our walk in Figure 1).
This is often frustrating for some investors because sustained periods of beat/raises on EPS have been hard to come by – in part due to all the moving parts and in part because opex tends to always surprise to the upside (see Figure 3).
We are sympathetic to this complaint, but fundamentals for the segments that really drive the narrative (CPU/GPU) are headed in a positive direction and we see a clear path to >$11 of EPS in C2027 and >$15 of EPS in 2028.
Although the next window for big beats and raises is probably not until more toward the end of the year with MI455x ramping significantly in CQ4, these sorts of EPS numbers should be enough to carry the stock higher and we do sense that the company will finally show some big operating/EPS leverage in C2027/2028.
Net, our revenue and EPS for C2026/2027/2028 change only minimally and we maintain the Buy, but we are trimming out PT from $330 to $310 in recognition of ongoing multiple compression occurring among AMD’s frontline AI peers like NVDA and AVGO.”
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