Wall Street's highest target for AMD is $700, with institutions optimistic about its computing business
Cantor Fitzgerald analyst C.J. Muse will raised its target price from $500 to $700 and maintained an "Overweight" rating. This means that the target price is currently the highest forecast given by Wall Street for AMD. Cantor now lists the stock as its top pick in the computing sector, even ahead of Nvidia and Broadcom. Cantor gives AMD a $700 price target, surpassing Nvidia and Broadcom Muse said that AMD currently shows the strongest computing business growth momentum among semiconductor companies. On the other hand, he thinks The recent chip expansion is more likely to eventually return to the essence of a "mobile phone company". However, he still believes that the current valuations of Nvidia and Broadcom are not expensive, even if their stock prices have fluctuated recently. Gurufocus also confirmed that AMD still maintains an "overweight" rating under the new target price. Meanwhile, UBS analyst Timothy Arcuri set a price target of $670; Aaron Rakers raised his target price to $615. Wells Fargo pointed out that the reason for its optimism is not the GPU business, but AMD's undervalued server CPU business. AMD data center business supports optimistic expectations According to AMD's financial report, the company's first-quarter revenue reached US$10.3 billion, with a gross profit margin of 53% and diluted earnings per share of US$0.84. Among them, data center revenue increased by 57% year-on-year to US$5.8 billion, accounting for more than half of total revenue. AMD CEO Su Zifeng said that with the growth of AI reasoning and "autonomous AI agents", demand for high-performance chips continues to be strong. Two developments further support this trend: AMD's latest generation server chip EPYC Venice has begun mass production ramp in May The company claims that this generation of products has been tested by more customers than any other generation of EPYC released in history. In addition, AMD reached a formal agreement with Rackspace Technology on June 16 to provide 30 megawatts of AI computing power, and the project will be advanced in phases until 2028. Why the market's average price target remains lower than Cantor's Still, the market is not unanimously bullish. Wall Street's current average target price for AMD is $509.75, significantly lower than Cantor's $700 and below its recent stock price levels. The 35 analysts covering the stock have a wide range of price targets, ranging from $250 to $700, one of the most divided among the big chip companies. In addition, AMD's expected price-to-earnings ratio of about 70 times also provides reasons for caution. The news that Meta may resell excess AI computing power also increases uncertainty. But D.A. Davidson analyst Gil Luria still maintains a "buy" rating, believing that despite the increase in noise, demand for AI computing power still clearly exceeds supply. At present, Cantor Fitzgerald is one of the most aggressive bulls on Wall Street, betting that the growth momentum of AMD's computing business still has room to continue. Whether Wall Street will gradually follow suit will likely depend on the performance of AMD's server CPU business in its second-quarter earnings report released in August.