BofA Lowers AMD Price Target to $650

BofA Securities analyst Vivek Arya lowered the price target on AMD (NASDAQ: AMD) to $650 (from $720) while maintaining a Buy rating.

“AMD checked every box we expected ahead of the earnings call: 1) Q4 guidance beat handily despite PC headwinds, 2) CY27 server CPU sales growth outlook raised again (to 100% YoY from 70%+ prior), 3) GM expected to hold near current levels despite rising HBM costs, and 4) management highlighted strong supply-chain alignment and customer readiness on financing, land, power and shell availability.

The company remains a model of consistent target setting and execution, with CY27 revenue growth now expected above 80% YoY and pf-EPS growth above 110% YoY (500bps above consensus), marking the fourth consecutive year of acceleration.

Bears are likely to push back on macro risks (AI financing), competition (NVDA and custom chips), gross margins (high HBM content increases exposure to memory cost inflation) and valuation (NTM P/E of 32x is twice that of NVDA/AVGO).

However, AMD continues to execute quietly and consistently.

Overall, we raise CY27/28E pf-EPS estimates by +4%/+6% to $16.95/$26.14, but lower our PO to $650 from $720 to reflect the recent contraction in sector multiples, now on 26x CY28E P/E vs.

30x prior, still within historical 13x-57x and near 28x median.”

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