Bernstein Upgrades AMD to Outperform

Bernstein SocGen Group analyst Stacy Rasgon upgraded AMD (NASDAQ: AMD) from Market Perform to Outperform with a price target of $525.00 (from $265.00).

“We have continually been surprised not only by the strength of AMD’s business but also by the strength of the stock (with shares +16% in the aftermarket after climbing by almost 40% over the last ~3 weeks).

That being said, while many stocks have been climbing strictly on vibes lately the company deserves significant credit for a fundamental story that increasingly is looking real.

Given the agentic AI boom, we believe that management’s new outlook for a doubling of their prior TAM (to a 35% CAGR by 2030 reaching ~$120B) is looking potentially plausible, and given their competitive product position AMD appears increasingly well-positioned to benefit from it.

And they have a GPU story as well, with their two anchor customers (OAI and Meta) set to ramp into year-end (numbers that to us have still not appeared to be fully reflected in Street models), with maybe more to come?

While we have acknowledged warming to the company in recent work we have remained on the sidelines, and of course jumping on the bandwagon now feels late.

Nevertheless (late or not) our own model now exceeds $14 in 2027, and we believe EPS approaching $20 in 2028 feels plausible assuming the AI boom continues.

While cautioning our clients that our history with AMD bull calls is spotty at best, and acknowledge risks (Helios ramp and customer traction, supply, 2H PCs, AI sustainability etc) this is enough to win us over, and we think the shares probably go up from here even after the run.

We upgrade to Outperform, and raise our PT to $525 (~35x vs 20x prior, on new FY27 EPS of $14.60).”

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