Shares of Advanced Micro Devices (AMD) have pulled back 16% over the past month amid concerns about rising competition in the artificial intelligence (AI) chip market and steep valuations. Despite the recent selloff, the stock is still up 78% year-to-date, and AMD bulls see strong upside potential for the chip maker. Their bullish stance is supported by the company’s robust position in the CPU market and growing demand for its AI GPUs (graphics processing units).
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AMD Is Confident of Strong Growth Ahead
AMD is confident about capturing massive demand in the AI chip market, which is currently dominated by Nvidia (NVDA). In fact, CEO Lisa Su expects the company’s AI data center business to grow at a CAGR (compound annual growth rate) of more than 80% over the next three to five years, backed by solid customer momentum and the next-generation AMD Instinct products and systems.
The company expects its overall revenue to increase at a CAGR of 35% over the next three to five years, driven by “insatiable” demand for AI chips.
Analysts Are Bullish About AMD Stock
While concerns about the lofty valuations of AI stocks and reports that Meta Platforms (META) is considering using Google’s (GOOGL) TPUs (Tensor Processing Units) in its data centers have weighed on investor sentiment recently, several Wall Street analysts remain confident about AMD’s growth potential.
For instance, Bank of America analyst Vivek Arya reiterated a Buy rating on AMD stock following the Meta-Google news. The 5-star analyst highlighted that AMD continues to gain from multiple growth catalysts across CPUs, GPUs, embedded, and gaming businesses.
Meanwhile, Raymond James analyst Simon Leopold recently resumed coverage on Advanced Micro Devices stock with a Buy rating and a price target of $377. The 5-star analyst believes that AMD is a leading supplier of CPUs, APUs (accelerated processing units), and GPUs in the consumer and data center markets. Leopold expects the latest deals with OpenAI (PC:OPAIQ) and HUMAIN for about 1 GW to be worth $15 billion in 2026 and grow to over 2 GW in 2027. He is also optimistic that AMD will continue to win share in server and PC markets and expects the OpenAI deployment to be an “important endorsement” that prompts more AI model builders and hyperscalers to adopt AMD GPUs.
Additionally, TD Cowen analyst Joshua Buchalter reiterated a Buy rating on AMD stock with a price target of $290. “Despite appropriate concerns, we believe AI compute spending will prove durable and AMD has cemented itself as a winner,” said the 4-star analyst. Buchalter expects AMD’s Helios rack and MI450 chips to drive a major inflection in the semiconductor giant’s growth story beginning in mid-2026.
Is AMD Stock a Buy, Hold, or Sell?
Currently, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock based on 28 Buys and 10 Holds. The average AMD stock price target of $284.67 indicates 32.2% upside potential.
