Advanced Micro Devices (NASDAQ:AMD) appears to be in rude health on multiple levels as the end of the third quarter approaches, with all segments performing strongly. At least that is the conclusion reached by Piper Sandler’s Harsh Kumar, an analyst ranked amongst the top 1% of Street stock experts, following the chip giant’s recent pre-quarter call.
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“The company sounded extremely optimistic about business prospects moving through 2H25 and into CY26. All the key core segments appear to be tracking to their forecast for the quarter in our view,” Kumar noted.
Kumar sees several tailwinds at play, including growth in the server, client, and GPU segments, as well as potential momentum in the embedded business.
In GPUs, the Instinct ramp is “going extremely well,” and management remains positive about further sequential growth heading into Q4. Kumar’s model assumes 12% quarter-over-quarter growth, though the analyst believes there could be upside driven by China license approvals and broader AI capex trends. Specifically, he is calling for close to a $1 billion sequential increase in Q3 vs. Q2.
Meanwhile, the client segment remains strong, having grown 70% year-over-year in the first half of 2025. Most of this growth is coming from desktops, while the notebook segment is benefiting mainly from higher ASPs (average selling prices). Kumar anticipates continued momentum in the client business through Q3 and Q4, with sequential growth in both periods. The Windows 11 upgrade cycle is also expected to provide a meaningful boost to PC demand in the second half of the year.
In the server segment, AMD continues to capture market share, with an expected additional 8% gain over its closest competitor, Intel, this year. “We expect similar share gains next year of roughly the same magnitude,” Kumar confidently said. Currently, AMD holds a 41% share, and over the long term, the market is likely to remain largely split between the two major players. Management has noted that demand for servers is “very steady,” with their primary focus on maintaining consistent supply. They also indicated willingness to produce ARM-based chips if there is customer demand.
Kumar thinks the inventory correction in AMD’s embedded business is mostly complete. Although the segment is expected to be flat this year, the analyst still forecasts a slight y/y decline of about 5%. “We feel that this small variance could be a source of upside relative to our model,” he said on the matter.
Lastly, the company also provided an update on China licenses, saying it received several licenses to sell its MI308 chip in China. However, the company expects only a modest contribution to revenue from these sales in Q3 and Q4.
Bottom line, for Kumar, AMD still trades at a discount compared to its peers, with the analyst assigning the stock an Overweight (i.e., Buy) rating, backed by a $190 price target. (To watch Kumar’s track record, click here)
Turning now to the rest of the Street, where AMD claims an additional 22 Buy recommendations and 12 Holds, for a Moderate Buy consensus rating. Going by the $188.07 average target, a year from now, shares will be changing hands for a 17% premium. (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.