Advanced Micro Devices (AMD) is making steady progress in the AI chip race, driven by strong GPU demand and rising data center sales. The stock is up 14% this year, with a 60% jump in the past three months alone. Building on this rally, Vijay Rakesh, a 5-star analyst of Mizuho Securities, recently raised his price target on AMD to $152 from $135, while keeping a Buy rating. The new target points to about 10% upside from current levels. He remains upbeat on AMD’s AI potential, even though the company is still trying to catch up to market leader Nvidia (NVDA).
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Top Analyst Cuts Estimates but Remains Bullish on AI Ramp
Rakesh, a Top-rated analyst, slightly revised his earnings forecast for AMD. While he kept his revenue estimates steady, he lowered his earnings projections due to margin pressures. For the upcoming June quarter, he still expects revenue of $7.40 billion, but cut his EPS estimate to $0.47 from $0.68, slightly below the Street’s expectation of $0.49.
Looking ahead to Fiscal 2025, he maintained his revenue forecast at $32 billion but trimmed his EPS estimate to $3.90 from $4.02. His 2026 earnings forecast also came down to $5.86 from $6.28, though it’s still slightly above the Street’s $5.81. For 2027, Rakesh raised his revenue projection slightly and kept EPS unchanged at $7.19, reflecting his confidence in AMD’s long-term growth as its newer AI chips begin to scale.
MI355X Ramp Could Be a Catalyst in Late 2025
Rakesh is optimistic about the potential of AMD’s MI355X AI accelerator, which he expects to gain momentum in the second half of 2025. While Nvidia is still the dominant player in AI chips, Rakesh noted that many large cloud companies are starting to look for other options to reduce their reliance on a single supplier. This shift could benefit AMD going forward.
That said, Rakesh also noted that software continues to be a weak spot for AMD, limiting its ability to compete head-on with Nvidia. He believes AMD still has work to do on the software front to fully unlock the value of its AI hardware.
Is AMD a Buy or Sell Now?
According to TipRanks, AMD stock has a Moderate Buy consensus rating based on 24 Buys and 10 Holds. The average AMD stock price target of $132.76 indicates a possible downside of 3.73% from current levels.
