Baird Raises AMD Price Target to $625

Baird analyst Tristan Gerra raised the price target on AMD (NASDAQ: AMD) to $625.00 (from $300.00) while maintaining a Outperform rating.

“AMD now expects server CPU TAM to exceed a 35% 3-5 year CAGR (up from prior forecast of a 18% CAGR), to $120B by 2030, primarily driven by agentic AI workloads.

AMD sees specific CPU designs targeting general-purpose operations, head nodes, and agentic AI tasks, with room for both x86 and ARM.

Server CPU revenue is expected to grow over 70% YoY in 2Q. Venice remains on track to launch in 2H, with Verano, a purpose-built CPU for AI infrastructure.

Customer engagement exceeds that of prior Epyc generations. Management highlighted shipping a lot of Zen 4 Genoa CPU as well, with Turin reaching crossover in the reported quarter.

Mi450 demand ahead of launch is exceeding management’s initial expectations with lead customers, along with an increasing number of new customers.

AMD expects PC shipments to be lower in 2h versus 1h due to memory pricing, but still grow YoY driven by ongoing market share gains. Gross margin increase is driven by strength in server CPU shipments.

Management expects continued positive gross margin dynamics offsetting an initially dilutive ramp of Mi450. New price target is $625. Outperform-rated.”

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