Advanced Micro Devices (AMD) stock rose 2% Tuesday following an upgrade from Truist Securities analyst William Stein. The five-star analyst changed the rating to Buy from Hold and raised the price target to $213 (28.1% upside) from $173. The bullish review is based on growing demand from data centers and the company gaining traction in the artificial intelligence (AI) sector.
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Hyperscale Customers Are Taking AMD Seriously
According to Stein, conversations with industry contacts indicate that customers are now engaging with AMD as a genuine partner, exploring large-scale deployments of its technology.
This marks a notable change from previous years when AMD was seen as a secondary player in the AI hardware race, often used by hyperscalers as a “price check” against rival Nvidia (NVDA).
Interestingly, Stein compared AMD’s current progress in AI to its earlier success with server chips. He noted that AMD’s market share was less than 1% before its “Rome” product helped it gain a foothold as Intel (INTC) faced challenges. Today, AMD holds over 20% of the server CPU market.
While the analyst does not expect Nvidia to make similar missteps, he projects that AMD will secure close to 10% of the GPU market share over time.
Stein also increased his earnings per share (EPS) estimates, now projecting a calendar year 2027 EPS of $7.89. He believes AMD’s recently launched MI355 chip will be a key driver of growth in the quarters to come.
New Partnership with IBM
Separately, AMD and IBM (IBM) disclosed a new partnership to build powerful computers that combine quantum technology with traditional chips. Their goal is to solve big problems such as climate change and drug discovery by using both types of computing: quantum for complex tasks and AMD’s chips for speed and power.
They also want to make quantum computers more reliable in the future. AMD’s tech could help fix errors in real time, which is key to making quantum systems useful for everyday business. Also, IBM’s secure hybrid cloud environment could help businesses efficiently scale their AI workloads.
Is AMD a Buy or Sell Now?
Turning to Wall Street, AMD stock has a Moderate Buy consensus rating based on 26 Buys and 10 Holds assigned in the last three months. At $184.91, the average AMD price target implies an 11.3% upside potential.
