‘Time to Jump In,' Says Analyst as He Upgrades Rating and PT on AMD Stock
Semiconductor giant Advanced Micro Devices (AMD) is starting to gain traction in the AI race, after earlier concerns about lagging Nvidia (NVDA). The stock is down 19% over the past year but is up more than 7% year-to-date. In a new update, Melius Research analyst Ben Reitzes upgraded the stock to Buy from Hold and raised the 12-month price target to $175.00 from $110.00, suggesting an impressive 35% upside from current levels. He believes the company's position has improved meaningfully in the AI space since the start of the year.
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Analyst Sees AI Upside Still Not Priced In
According to Reitzes, AMD has moved past the early rebound phase and is now 'in the middle' of a broader rally, with further upside expected. While shares have seen big swings—rising to $211 last year before falling below $80 in 2025—he believes that recent progress isn't yet fully reflected in the price.
One key reason behind this view is the growing demand for AMD's AI chips. The analyst pointed to strong interest from cloud providers and government-backed firms in AMD's MI300 and MI350 chips—both built for AI tasks. The upcoming MI400 line is also drawing early attention. He believes AI inferencing is turning out to be 'much bigger' than expected. With stronger memory and better software, AMD's chips are becoming more attractive to high-end buyers.
The analyst also pointed to AMD's partnerships with Amazon (AMZN), Meta (META), OpenAI, and Saudi-based AI group HUMAIN. It's important to highlight that AMD and HUMAIN are investing up to $10 billion in data center projects across the Middle East. Melius believes this could drive major gains in the region, where AMD's market share may surpass its global share.
Other Segments Show Signs of Strength
While AI remains the top driver, Reitzes also noted signs of strength in AMD's PC business, due to higher average selling prices and modest share gains from Intel (INTC). These gains could help buffer AMD if Nvidia eventually enters the PC CPU market.
Looking ahead, he also expects continued growth in AMD's server chip business. New products like the 'Venice' CPU and the 'Helios' rack-scale platform could help boost its presence in large data centers.
Given these tailwinds, the firm has raised its earnings estimates through 2027. It now expects EPS to reach $3.88 this year, rising to $5.77 in 2026 and $7.08 in 2027. The analyst adds that if AMD captures more than 5% of the global AI chip market, the upside could be even higher.
Is AMD Stock a Buy or Sell Now?
To summarize, Wall Street is cautiously optimistic on Advanced Micro Devices stock, with a Moderate Buy consensus rating based on 22 Buys and 10 Holds. The average AMD stock price target of $132.17 indicates a modest upside potential of 2% from current levels.
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