Key Takeaways:
Advanced Micro Devices (NASDAQ:AMD) received another vote of confidence from Wall Street, with Wedbush lifting its price target to $450 from a previous $400, implying roughly 27% upside from the stock's closing price on May 5.
"This time around, AMD delivered in spades with Q1 upside largely driven by better than expected server compute revenues," Wedbush analysts said, noting that enterprise CPU strength and a promising outlook more than offset weakness in the company's gaming segments.
The upgrade follows AMD's blockbuster first-quarter earnings report on May 5, where the company reported a 57% year-over-year increase in its Data Center segment revenue to $5.78 billion. The stock has rallied 65.89% year-to-date. Wedbush's move echoes similar price target hikes from Barclays (to $500), Goldman Sachs (to $450), and Jefferies (to $415) in the wake of the results.
The string of analyst upgrades highlights a broader "CPU comeback" narrative gaining traction among investors. While Nvidia's GPUs have dominated the AI hardware conversation, the build-out of AI infrastructure requires a corresponding increase in the central processing units (CPUs) that manage data and orchestrate complex tasks. AMD's management recently boosted its total addressable market forecast for server CPUs to $120 billion by 2030, citing increased demand from agentic AI workloads.
While the majority of analysts have turned more bullish, some remain cautious. HSBC recently downgraded the stock to Hold, citing concerns that near-term upside may be capped by supply chain constraints at foundry partner TSMC.
The consistent analyst upgrades, however, signal Wall Street's growing confidence in AMD's role as a key beneficiary of the expanding AI data center market. Investors will watch the company's second-quarter results for confirmation that the server revenue acceleration can be sustained.
This article is for informational purposes only and does not constitute investment advice.
