Will AMD Stock Skyrocket as AI Demand Explodes? Analysts Weigh In

AI's insatiable hunger for processing power is reshaping markets—and AMD's chips are at the center of the feast. Wall Street's buzzing: Can this semiconductor underdog outmuscle rivals as the AI gold rush accelerates?

Behind the hype: While Nvidia dominates headlines, AMD's stealthy architecture gains could make it the dark horse of the AI chip race. Their MI300X accelerator isn't just competing—it's rewriting the rules for large language model training.

The cynical take: When even analysts admit 'AI' now stands for 'Absurd Inflation' of stock valuations, tread carefully. This isn't 2021's meme-stock madness—but the FOMO feels eerily familiar.

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Analysts Are Upbeat on AMD’s Growth Prospects

Several analysts are now confident about Advanced Micro Devices closing the gap with rival Nvidia, driven by innovative products like the new MI400x chips and strategic acquisitions such as the ZT Systems deal. Moreover, prospects in sovereign AI have boosted investor sentiment.

At the recently held Advancing AI event, AMD provided new details about its next-generation AI chips, the Instinct MI400 series, which will compete with Nvidia’s GPUs (graphics processing units). Moreover, AMD’s MI350X and MI355X AI accelerators are expected to compete with Nvidia’s Blackwell products.

This week, Melius Research analyst Ben Reitzes upgraded Advanced Micro Devices stock to Buy from Hold and increased the price target to $175 from $110. The analyst noted several positives, including stronger-than-anticipated demand for AMD’s MI300 and MI350 series GPUs as well as early traction for the upcoming MI400 platform. Reitzes also highlighted demand for AMD’s products in AI inferencing and reducing risks in the PC segment. He also highlighted robust deal momentum, including those with Amazon (AMZN), OpenAI, Meta Platforms (META), and Saudi Arabia’s HUMAIN. Aside from GPUs, Reitzes expects continued share gains in high-margin server CPUs.

Meanwhile, Piper Sandler analyst Harsh Kumar increased the price target for AMD stock to $140 from $125 and reiterated a Buy rating. The 5-star analyst expects the company’s new products to aid GPU growth. Kumar is particularly enthusiastic about the Helios rack, which he thinks is key for AMD Instinct’s growth. He expects a “snapback” in AMD’s GPU business in Q425.

While Kumar’s price target indicates a 2.4% downside from current levels, Reitzes’ price target implies a 22% upside potential.

Is AMD a Buy or Sell?

Amidst macroeconomic challenges and concerns about chip export restrictions, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock, based on 24 Buys and 10 Holds. The average AMD stock price target of $132.17 indicates a possible downside of 7.8% from current levels.