TD Cowen analyst Joshua Buchalter reiterated his “Buy” rating on Advanced Micro Devices (AMD) stock and raised the price target to $195 (from $165), implying 11.9% upside potential from current levels. AMD stock is trending down 6.2% in pre-market trading at the time of writing, as the chipmaker reported mixed second-quarter results yesterday. Buchalter is encouraged by AMD’s beat-and-raise results and believes the hurdle is cleared for now, with attention turning to continued execution going forward.
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AMD’s revenue rose 32% year-over-year to $7.69 billion, beating consensus estimates, while adjusted earnings of $0.48 per share were in line with expectations. Importantly, AMD raised its Q3 revenue guidance to roughly $8.7 billion (+/-$300 million), well above the consensus expectation of about $8.3 billion. Also, the adjusted gross margin is expected to be approximately 54%, assuming no contribution from MI308 shipments to China.
Why Is TD Cowen Bullish About AMD?
Buchalter highlighted the strength in AMD’s CPU (central processing unit) and Gaming segments, despite zero contribution from MI308. He noted that the largest contributor to AMD’s Q3 growth is the Instinct franchise, as the company seeks to ramp up production of the MI355 chips in the second half of 2025. AMD’s Q3 performance will also prove its competitiveness ahead of the MI400/Helios launch in 2026.
Regarding the resumption of MI308 sales to China, AMD mentioned that the U.S. government is reviewing its export applications and, therefore, has not included any China sales in its Q3 guidance. Buchalter believes AMD’s management will prioritize MI355 chips over MI308 in the near term.
The analyst expects AMD to maintain growth in server CPUs driven by solid demand for artificial intelligence (AI) applications. Moreover, the cloud and enterprise segments are projected to show consistent growth, while the Client segment is expected to experience modest growth. Meanwhile, Buchalter expects higher operating expenses due to research and development and AI initiatives, which may weigh on AMD’s near-term earnings potential.
Is AMD a Good Stock to Buy Now?
Analysts remain divided on AMD’s long-term outlook. On TipRanks, AMD stock has a Moderate Buy consensus rating based on 24 Buys, 10 Holds, and one Sell rating. The average AMD price target of $158.57 implies 9% downside potential from current levels. Year-to-date, AMD stock has gained 44.3%.
Please note that most of these ratings were given before AMD’s Q2 earnings report and may change once analysts review their recommendations.
