RBC Capital Reiterates Sector Perform on AMD, $540 PT

RBC Capital analyst Srini Pajjuri reiterated a Sector Perform rating and $540 price target on AMD (NASDAQ: AMD).

“AMD raised its GPU/CPU TAM estimates, highlighted GPU benchmarks, and discussed its product roadmap at Advancing AI event.

On recently announced Anthropic partnership, management expects initial 1GW (of 2GW total) to ramp mostly in 2027, which should represent $10-$20B in incremental revenue.

CPU momentum was also a key theme while AI-assisted kernel generation was flagged as a meaningful inflection point in closing the software gap.

We are raising our estimates to incorporate the Anthropic deal, and at 36x CY27E EPS, we believe further outperformance is largely a function of strong MI455/Helios ramps.

We view component supply, rack-scale execution, and competition as key risks and would wait for evidence of Helios volume ramps before getting more constructive.”

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