Why AMD may see a 40% stock rip after Strong Buy call
Raymond James raised Advanced Micro Devices to Strong Buy with a $641 price target, implying about 40% upside after a post-earnings sell-off. Motley Fool-style AI investors tracking Nvidia rivals should note AMD's data-center surge, Helios deals, and a server CPU market analyst Simon Leopold sees near $201 billion by 2030.
Key Takeaways
- Raymond James upgraded AMD to Strong Buy and lifted its target to $641 from $565, roughly 40% above recent levels.
- About 72% of covering analysts rate AMD a Strong Buy or Buy; the peer-average target sits near $613.
- Q2 revenue hit a record $11.5 billion, up 50% year over year, with data-center sales more than doubling to $6.7 billion.
- Microsoft plans Helios on Azure in H2 2026; Anthropic may deploy up to 2 GW of Instinct MI450 GPUs starting in H1 2027.
- AMD shares jumped about 5% in afternoon trading on the upgrade news.
Why did Wall Street suddenly turn more bullish on AMD?
According to Yahoo Finance, Raymond James analyst Simon Leopold upgraded AMD from Outperform to Strong Buy and raised his target to $641 from $565. That call sits above the roughly $613 average peer target.
Leopold argues AMD offers "the strongest combination of direct earnings leverage, datacenter positioning and market-share gains." He also sees the server CPU market rising at a 44% five-year compound annual growth rate to about $201 billion by 2030, with AMD positioned for an agent-driven workforce.
A separate Seeking Alpha upgrade thesis frames an AI tipping point: data-center revenue surged 107% year over year and now accounts for nearly 60% of sales, with management signaling growth can outpace earlier mid-30% targets.
What earnings and guidance back the 40% upside case?
AMD beat estimates across the board for the second quarter, posting record non-GAAP earnings per share of $1.66 versus $1.61 consensus. Total revenue reached a record $11.5 billion against projections near $11.34 billion.
The Data Center segment more than doubled year over year to $6.7 billion on demand for EPYC server CPUs and Instinct AI accelerators. Management projected second-half 2026 server CPU revenue to grow 80% year over year and 70% in 2027, with data-center revenue more than doubling in 2027 and AI GPUs growing well over 100%.
That runway is why many Motley Fool readers who follow semiconductor growth stories are watching whether Street targets keep climbing after the recent dip.
Can AMD's new AI chips challenge Nvidia in the data center?
AMD unveiled next-generation Instinct MI450 Series GPUs and 6th Gen EPYC Venice CPUs for Helios rack-scale AI systems that combine GPUs, CPUs, networking, and software. Microsoft will deploy Helios across Azure AI services beginning in the second half of 2026.
Anthropic plans to deploy up to 2 gigawatts of Instinct MI450 GPUs in Helios starting in the first half of 2027—a pact that could be worth tens of billions over time—while AMD committed to invest up to $5 billion in Anthropic. CEO Lisa Su told Yahoo Finance demand for compute remains at a premium and the company is confident in the demand picture.
For more AI and chip coverage, explore BlasterPost's Future Tech & AI Wonders hub. As always, analyst targets are not guarantees—AMD's valuation and AI-cycle risks still matter for long-term holders.