Cowen Doubles Down on AMD Stock

Chip stock Advanced Micro Devices (NASDAQ:AMD) hasn’t managed to light a fire under investors when it comes to its AI narrative. Expectations were riding high ahead of the recent Advance AI event, but the showcase came and went without delivering the stock a much-needed jolt.

That said, while the event failed to move the needle on Wall Street, it wasn’t without substance. AMD unveiled the MI350 series and ROCm 7, teased its upcoming MI400 “Helios” rack-scale solution, and even featured a cameo from OpenAI’s Sam Altman.

Cowen analyst Joshua Buchalter acknowledges the market’s muted reaction, attributing it to the absence of financial updates. Still, he views the event as a meaningful step forward.

“We think AMD is laying important groundwork to more effectively participate in the AI TAM,” said Buchalter. “Still a ‘show-me’ story, but one we’re confident in.”

Rome wasn’t built in a day, says Buchalter, but the MI350 and MI400 feel like the AI GPU counterparts to AMD’s early CPU platforms, which laid the foundation for a turning point. The event, he notes, tackled the very challenges that have hindered wider adoption of AMD’s Instinct GPUs: expanding its ROCm software stack and developer community, and launching a competitive rack-scale solution by 2026.

Altman shared his enthusiasm for the MI450X – slated for release in the second half of 2026 – highlighting its potential for both inference and training, thanks to the close collaboration between OpenAI and AMD, offering “important early validation” for the product.

AMD also showcased significant upgrades in ROCm 7 and pointed to its growing developer community as further momentum behind the platform.

Buchalter acknowledges the significance of having seven of the ten largest AI players now using AMD chips. This includes early adopter Oracle, which is set to be one of the first to implement AMD’s upcoming rack-scale solutions. The support is further reinforced by endorsements from major AI leaders like OpenAI, xAI, and Meta. “That said,” he went on to add, “we think AMD’s sharp 2H25 AI GPU revenue ramp remains a ‘show-me’ story and is necessary to prove its competitiveness against NVIDIA (and ASIC rivals)… and drive investor confidence.”

Moreover, investors will likely want concrete evidence that AMD can successfully scale its rack-scale solutions, especially considering Nvidia’s widely known early struggles in this area (which now appear largely resolved).

Nevertheless, Buchalter thinks the company is moving in the right direction.

“Against an expanding TAM, we think AMD is making the necessary gradual moves to cement its position as the de facto merchant alternative to NVIDIA,” the analyst summed up.

All told, Buchalter assigns a Buy rating to AMD shares, although his $115 price target suggests the shares will stay rangebound for the time being. It will be interesting to see if Buchalter updates his target shortly. (To watch Buchalter’s track record, click here)

Elsewhere on the Street, the stock claims an additional 21 Buys and 11 Holds for a Moderate Buy consensus rating. At $127.23, the average price target suggests shares will climb 11% higher in the months ahead. (See AMD stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.