Analysts reset AMD stock price target ahead of key earnings

Advanced Micro Devices (AMD) stock is on the rise as the chipmaker gains momentum in the AI race, following months of lagging behind Nvidia (NVDA) .

It was reported earlier this week that AMD is thinking of raising the price of its Instinct MI350 AI accelerator to $25,000 from $15,000, according to Wccftech's report citing HSBC's analyst note.

The nearly 70% increase in MI350's price could mean a notable growth in AMD's future revenue. The price increase indicates that AMD is seeing demand for its AI products, the report said.

AMD's stock had tumbled in 2024 and earlier this year on concerns about trading uncertainties and its competitive footing. Now, with news on the company's advanced chips, Wall Street is starting to reconsider AMD’s long-term potential in the booming AI space.

In June, AMD's CEO Lisa Su said at a developer conference that the MI350 series is faster than Nvidia’s. Meanwhile, the MI350 is cheaper than its counterpart product from Nvidia's Blackwell B200, Wccftech reported.

Su previously predicted $500 billion in AI accelerators market revenue by 2028, but she now sees it topping that number.

“People used to think that $500 billion was very large number,” she said. “Now it seems well within grasp.”

Shares of AMD are up more than 14% over the past five trading days.

AMD is set to report its second-quarter earnings on August 5.

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What to expect from AMD

Three months ago, AMD reported stronger-than-expected first-quarter results and gave a solid forecast for the second quarter, even as it faced challenges from the broader economy and export restrictions on AI chip sales to China.

The company then posted adjusted earnings of 96 cents per share on $7.44 billion in revenue, both beating Wall Street’s expectations. Its data center business generated $3.7 billion in sales, a 57% increase from a year earlier and also ahead of analyst estimates.

“While we face some headwinds from the dynamic macro and regulatory environments…we believe they are more than offset by the powerful tailwinds from our leadership product portfolio,” Su said in May.

AMD is set to report its second-quarter earnings on August 5. Wall Street expects earnings of 47 cents per share on revenue of $7.41 billion.

Several analysts are more optimistic and believe the company may deliver stronger results than expected.

Analysts raise AMD stock price targets ahead of earnings

Bank of America has raised its price target on AMD to $200 from $175, maintaining a Buy rating ahead of the earnings report. The firm said it expects AMD to beat expectations in both Q2 and Q3, driven by strong demand for its AI GPUs and CPUs, according to a research note published on July 29.

BofA sees upside supported by solid demand for CPU and GPU, stronger pricing for AI chips, and a robust cloud capex environment, analyst Vivek Arya wrote.

The firm said AMD is well-positioned to gain market share in both the PC and server CPU markets over the next two years. The firm also expects AMD to maintain a growing presence in the AI accelerator space, benefiting from its current product momentum and competitive pricing compared to Nvidia.

“Longer-term, we expect AMD to reach more than 30% of overall CPU market by CY26, up from just below 20% in CY23, as well as potentially 4-5% of AI GPU market,” Arya noted.

There may also be additional upside if AMD receives regulatory approval to resume AI chip shipments to China, according to the report. While not yet confirmed, BofA sees that potential as a key factor for AMD’s GPU sales outlook.

UBS also recently raised its price target to $210 from $150 and maintained a buy rating, citing strength in both the PC and server segments, thefly.com reported on July 29.

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The firm said it expects upside in AMD’s second-quarter results, with guidance likely to beat Wall Street expectations.

AMD stock has climbed more than 46% year-to-date. Nvidia is up 30% over the same period.