Advanced Micro Devices (NASDAQ:AMD) has a big opportunity ahead and with 2026 now getting ever-nearer, in anticipation of a strong year, the semi giant is a company investors should be taking a serious look at right now. That is the opinion of Cowen analyst Joshua Buchalter, who has made the chipmaker a Best Idea for 2026.
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Interestingly, Buchalter’s call comes at a time of rising investor concerns around growing competition – both for AMD and its clients – and a more general fear of an AI bubble. Against this backdrop, Buchalter thinks AMD has “garnered more bearish sentiment than deserved and than peers.” With the stock down 19% from its October peak, between AMD and Broadcom as potential alternatives to Nvidia, the analyst believes AMD has “borne the brunt of investor scrutiny.”
Buchalter agrees the concerns are real, but after reviewing the details, the analyst has come away more confident in AMD’s technical and operational roadmap. The combination of a steadily improving hardware lineup, continued momentum in the ROCm software ecosystem, and – above all – meaningful customer wins has reinforced his view that AMD is positioned to “create and capture value” in AI compute.
Given the massive TAM ahead, he believes mid-2026 will mark a turning point. That’s when the Helios rack and MI450 arrive, which he sees as a “key inflection in AMD’s story.” As he puts it, investors should consider owning the stock before that ramp, with his model pointing to 4Q26 EPS accelerating to a >$10 run-rate, roughly doubling both year over year and quarter over quarter.
Buchalter also argues that the market is being overly harsh on AMD because of its OpenAI exposure. While Broadcom and Nvidia currently have deeper ties to Google – this cycle’s “AI flavor of the month”—his analysis shows that AMD’s projected 2027 revenue exposure to OpenAI is actually in the same ballpark. He expects that concentration risk will ease anyway as other heavyweight customers scale their deployments, including Oracle and Meta.
Moreover, with CEO Lisa Su recently signaling that several additional GW-scale customers should emerge in the MI450 time frame, Buchalter sees a realistic path for Instinct revenue to climb into the tens of billions as early as 2027. His model goes even further out, projecting about $89 billion in Instinct revenue by 2030, a 67% CAGR, and still below AMD’s own target of above 80%.
Finally, with so much focus on AI accelerators, investors have largely brushed aside AMD’s server and client CPU businesses. Buchalter sees that as a mistake. The analyst argues these segments remain foundational to the overall story, providing both diversification and meaningful growth potential. He expects AMD to continue gaining share here, with AI acting as an additional demand tailwind.
“Given the recent sell-off and what we see as excess scrutiny versus peers, we see an attractive entry point,” Buchalter summed up.
Accordingly, the analyst assigns AMD a Buy rating, alongside a $290 price target. Should the figure be met, investors will be pocketing returns of 33% a year from now. (To watch Buchalter’s track record, click here)
27 other analysts also take a positive stance on AMD, while 10 extra Holds add up to a Moderate Buy consensus rating. The forecast calls for 12-month returns of ~31%, considering the average price target clocks in at $284.67. (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.