‘Expect AMD to Close the Gap with Nvidia,’ Says Top-Rated Analyst

Shares of AMD (AMD) are rallying in today’s trading session after investment firm CFRA upgraded the chipmaker. This was due to the strong growth potential that is tied to its future products and sales momentum. Indeed, 4.5-star analyst Angelo Zino explained that AMD is expected to close the gap with rival Nvidia (NVDA) in 2026 when it launches its new MI400x chips and shifts toward rack-scale computing solutions. Additionally, the recent acquisition of ZT Systems is expected to support this transition and boost GPU sales.

Zino also pointed out that AMD has a growing list of customers that are using its AI accelerators, such as Oracle (ORCL) and OpenAI, which is a sign of the company’s expanding market presence. At the same time, AMD is making steady progress on improving its AI software stack, known as ROCm, which helps support its AI hardware.

Looking forward, AMD is likely to benefit from a sharp rebound in the GPU server market, which is expected to start in the fourth quarter. Zino also sees additional upside from sovereign AI projects (government-led initiatives) and a possible return to China, which could open more doors for AMD. Together, these factors indicate a growing demand and more opportunities for the company over the next year. As a result, Zino upgraded his rating from Buy to Strong Buy and raised his price target from $125 to $165.

Is AMD a Buy, Sell, or Hold?

Overall, analysts have a Moderate Buy consensus rating on AMD stock based on 23 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMD price target of $132.17 per share implies 3.4% downside risk.

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