Key Takeaways
- Wells Fargo upgraded AMD’s price target from $505 to $615 while maintaining its Overweight rating on the stock.
- Shares of AMD finished Monday’s session at $539.49, gaining 3.4%, with the revised target suggesting 14% potential upside.
- Wells Fargo analyst Aaron Rakers projects AMD’s server CPU division will generate $16 billion in revenue during 2026, representing 68% growth.
- The firm forecasts AMD’s data center GPU revenue will reach $63 billion by 2028.
- AMD may achieve $20 in annual earnings per share ahead of its own internal timeline, according to the analysis.
Advanced Micro Devices (AMD) shares finished Monday’s trading session at $539.49, registering a 3.4% gain, before advancing an additional 0.5% during Tuesday’s premarket hours. The positive momentum followed Wells Fargo’s decision to increase its price target on the semiconductor manufacturer from $505 to $615.
Advanced Micro Devices, Inc., AMD
The updated price objective suggests approximately 14% upside potential from Monday’s closing price. Wells Fargo analyst Aaron Rakers reaffirmed his Overweight rating on the stock.
Rakers brings considerable credibility to his semiconductor analysis. According to TipRanks, he holds the #8 position among more than 12,000 tracked analysts, boasting a 73% accuracy rate on his calls.
His optimistic outlook centers on a straightforward thesis: agentic AI applications are consuming massive amounts of computing power, and AMD’s processors are positioned to capitalize on this trend.
Data Center Processor Business Fueling Growth Trajectory
Rakers forecasts that AMD’s server CPU segment will generate $16 billion in revenue throughout 2026. This represents a substantial 68% increase from current levels.
The analyst doesn’t anticipate any deceleration in momentum. His projections call for revenue reaching $20.5 billion in 2027, followed by $25 billion in 2028.
Hyperscale cloud platforms continue building out AI infrastructure. Meanwhile, enterprise customers are upgrading their data center environments, driving increased adoption of AMD’s high-core-count EPYC processor lineup.
Rakers also highlighted favorable pricing dynamics. As customers select more advanced EPYC configurations, AMD captures improved profit margins on every transaction.
Graphics Processing Unit Revenue Strengthens Overall Financial Picture
The revenue story extends beyond processors alone. Rakers maintained AI GPU revenue projections that exceed consensus Wall Street estimates.
His model anticipates $15.6 billion in data center GPU revenue for 2026. That figure escalates to $40.6 billion throughout 2027 and reaches $63 billion by 2028.
When combined with processor growth expectations, these projections prompted Rakers to raise his earnings forecasts. He now anticipates $13.40 per share in 2027 and $18.75 in 2028.
These estimates give him conviction that AMD could surpass $20 in annual earnings per share before the company’s own guidance timeline.
Product development cycles also support the bullish case. AMD’s upcoming 2nm EPYC Venice processors entered production during late May.
High-volume shipments are scheduled for the second half of 2026. AMD has indicated that customer validation and production ramp activities for Venice are progressing faster than any previous EPYC processor generation.
However, not all Wall Street analysts share the same level of enthusiasm. The overall consensus rating on AMD stands at Strong Buy, comprising 28 Buy ratings and seven Hold ratings issued during the past three months.
The consensus price target averages $507.18. This figure actually falls below AMD’s current market price, implying approximately 6% downside rather than additional upside potential.
Wall Street remains divided on how much further this rally can extend. Wells Fargo has just established one of the most optimistic positions among major research firms covering the stock.
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