Most Analysts Are Bullish About a Rebound in Advanced Micro Devices Stock (AMD)

Advanced Micro Devices (AMD) stock has risen more than 28% over the past month, driven by easing trade tensions and better-than-expected results for the first quarter of Fiscal 2025. However, the stock is still down 8.4% year-to-date due to macro challenges, chip restrictions, and tariff uncertainties. Nevertheless, most Wall Street analysts are bullish about the upside potential in AMD stock, driven by AI (artificial intelligence)-related tailwinds, growing data center revenues, strategic partnerships, and the ZT Systems deal.

This week, Advanced Micro Devices was in the news as it announced an agreement to sell ZT Systems’ server manufacturing business to Sanmina (SANM), an integrated manufacturing solutions company. Meanwhile, AMD will retain ZT Systems’ rack-scale AI solutions design business, in line with the company’s AI growth strategy.

Analysts Are Optimistic About AMD Stock’s Upside Potential

Following the news related to the sale of ZT Systems’ infrastructure manufacturing business, Stifel analyst Ruben Roy reiterated a Buy rating on AMD stock with a price target of $132, suggesting an upside potential of over 19% from Thursday’s closing. Roy thinks that this deal aligns with AMD’s stated goal of technological expansion with emphasis on AI infrastructure. In fact, it reflects his original thesis that AMD’s ZT acquisition was motivated by a shift towards rack-scale AI solutions.

The 5-star analyst believes that AMD’s ability to leverage about 1,200 engineers of ZT with rack-scale experience will be a crucial driver in its long-term AI roadmap.

Interestingly, commenting on investors’ concerns that AMD is lagging rivals like Nvidia (NVDA) in the AI race, Evercore analyst Mark Lipacis noted that management contends that while the GPU business market share ramp is viewed as slow by investors, it is following a similar long-term strategy that was successful in winning share in the server CPU market. Management added that the company is seeing success along a similar time frame in the GPU business as well.

They pointed out that first gen product is introductory (MI300 in GPUs, Naples in server CPUs), second gen (MI325, Rome) involves a large customer, third gen (MI350, Milan) has larger customers onboarding, and continued market share gains follow in 4th gen (Genoa, MI400) and beyond. The 5-star analyst observed that AMD believes that while investors are highly focused on its progress in the data center GPU space, they are perhaps not fully appreciating the company’s solid momentum and profitability in all markets (GPU, CPU, and Client). Based on his confidence in the semiconductor company, Lipacis reiterated a Buy rating on the stock with a price target of $126, reflecting an upside potential of about 14%.

Is AMD a Buy or Sell Now?

Despite the ongoing concerns over chip restrictions, uncertainties around trade policies, and macro challenges, several analysts remain bullish on AMD’s growth potential due to its innovation, dominance in the CPU market, and growing GPU business.

With 22 Buys and nine Holds, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock. The average AMD stock price target of $126.55 implies 14.3% upside potential.

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