Wall Street analysts gave positive but cautious takes on the long-term strategy outlined by chipmaker Advanced Micro Devices (AMD) at its financial analyst day in New York City. AMD stock rose Wednesday.
At the event on Tuesday, AMD forecast revenue increasing over the next three to five years at a compound annual growth rate (CAGR) above 35%. It expects a greater than 60% revenue CAGR for its data center business, fueled by its artificial intelligence processors.
The company also predicted an adjusted operating profit margin greater than 35% and sees adjusted earnings per share exceeding $20. It forecast gross margins in a range of 55% to 58%, from the current 54%.
“AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum,” Chief Executive Lisa Su said in a news release. “With the broadest portfolio of products and our deepening strategic partnerships, AMD is uniquely positioned to lead the next generation of high-performance and AI computing. We see a tremendous opportunity ahead to deliver sustainable, industry-leading growth. We have never been better positioned.”
Further, AMD now sees a total addressable market for its data center products of $1 trillion by 2030, compared with $200 billion this year.
AMD Stock Nears All-Time High
On Tuesday, following the afternoon event, AMD stock closed at 237.52, down 2.7% for the day.
However, in morning trades on the stock market today, AMD rose more than 10% to 261.80. It is now just below its record high of 267.08, reached on Oct. 29.
Meanwhile, shares of Nvidia (NVDA), AMD’s main AI chip rival, slid a fraction to 192.06. Nvidia stock is still responding to news that investor SoftBank had sold its stake in the chipmaker.
AMD highlighted Meta Platforms (META), OpenAI and Oracle (ORCL) as buyers of its AI processors. It is currently shipping Instinct MI350 series graphics processing units. It will deliver Instinct MI450 series GPUs in the third quarter of 2026, followed by the MI500 series in 2027.
“While they did not announce any new customer partnerships beyond what has already been disclosed (OpenAI, Oracle, Meta, U.S. government), they did (once again) suggest the presence of additional multi-GW (gigawatt) customer engagements (we shall see),” Bernstein analyst Stacy Rasgon said in a client note. He rates AMD stock as market perform with a price target of 200.
AMD Stock Is On Two IBD Lists
At least four Wall Street firms raised their price targets on AMD stock after the company’s presentation.
Melius Research analyst Ben Reitzes maintained his buy rating on AMD stock and increased his price target to 380 from 300.
“AMD made a solid pitch, emphasizing its strategic pillars of client/gaming CPUs (central processing units), server CPU, embedded, data center GPUs and networking,” Reitzes said in a client note. “While there are customer concentration risks with OpenAI, we think the interest in the MI450 is real and has broadened out to other model providers (like Anthropic).”
Other analysts were less impressed by AMD’s pronouncements. Oppenheimer analyst Rick Schafer said AMD’s presentation was “more sizzle than steak.” He is neutral on the stock with a perform rating.
AMD stock is on two IBD lists: IBD 50 and Tech Leaders.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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