Shares of Advanced Micro Devices (AMD), like other tech and artificial intelligence (AI) stocks, have been under pressure in recent trading sessions due to valuation concerns. Nonetheless, top TD Cowen analyst Joshua Buchalter reaffirmed a Buy rating on AMD stock with a price target of $290, reinforcing his bullish stance on the chip giant.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Following an investor call with AMD’s CFO Jean Hu and CVP of Financial Strategy and Investor Relations Matt Ramsay, Buchalter stated that while AMD still has a lot to prove as it scales up its AI business, he is “constructive” on the company’s ability to capture value in the rapidly growing AI total addressable market (TAM). The analyst discussed some of the aspects highlighted by management during AMD’s recently held Financial Analyst Day.
Top TD Cowen Analyst Is Optimistic on AMD Stock
Regarding the $1 trillion AI TAM, Buchalter contended that while management highlighted that this number covers only AMD’s addressable market – GPUs, CPUs, and server-side networking (DPUs and NICs, but not switches), he believes that the market size includes a small amount of China opportunity. That said, the 5-star analyst thinks that AMD’s revenue targets (over a 60% compound annual growth rate in the data center business) do not include the China business due to geopolitical uncertainty.
Furthermore, management clarified that the earnings per share (EPS) target of over $20 already factors in the full share dilution from the OpenAI deal (about 160 million shares), but does not consider any further dilution. Meanwhile, TD Cowen’s long-term model indicates potential earnings of more than $14 in 2028 and more than $24 in 2030.
Regarding concerns about expanding to rack scale, Buchalter highlighted that management stated that the chipmaker is taking several steps to reduce risks for the Helios ramp in the second half of 2026. Considering the challenges related to the transition, AMD held intensive talks with suppliers and customers, tested components in detail, and shifted to double-wide racks to improve design, signal quality, and serviceability for both Helios and denser racks. Management also noted strong progress on AMD’s ROCm software, which is expected to deliver a 10x jump in performance from MI355 to Helios alone.
Is AMD Stock a Buy or Sell?
Currently, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock based on 27 Buys and 10 Holds. The average AMD stock price target of $281.78 indicates 22.4% upside potential. AMD stock has rallied about 91% year-to-date.
