Raymond James Upgrades AMD to Strong Buy, $641 PT

Raymond James analyst Simon Leopold upgraded AMD (NASDAQ: AMD) from Outperform to Strong Buy with a price target of $641 (from $565).

“We extend our AI Factory framework to the server CPU market and forecast revenue growing at a 44% five-year CAGR to ~$201B in CY30, driven by conventional datacenter demand, CPUs that host and coordinate accelerators, and CPUs supporting agentic workloads.

We upgrade AMD to Strong Buy from Outperform, extend our model through CY28, and update estimates for Arm, Intel and NVIDIA.

Our forecast is broadly consistent with NVIDIA’s $200B long-term framework and below AMD’s $220B estimate, which our model can reach under a more aggressive scenario tied to AMD’s ~$1.4T accelerator TAM and higher agent adoption, concurrency and tool usage.

Accelerators perform dense model computation, while CPUs increasingly manage those accelerators and execute the retrieval, database, application, security, sandbox and tool workloads surrounding each model call.

Workload growth will not translate one-for-one into processor shipments because higher utilization, software efficiency, custom silicon and offload can absorb part of the increase.

AMD offers the strongest combination of direct earnings leverage, datacenter positioning and market-share gains.

Arm benefits from server royalty growth, custom silicon and its planned merchant CPU business.

Intel participates in a stronger market but remains exposed to share loss, while NVIDIA’s rapidly growing CPU franchise is strategically important but remains small relative to its accelerator business.”

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