TLDR
- Citi analyst identifies AMD as top-performing chip stock with strongest momentum following analyst event, surpassing Nvidia in investor preference
- TD Cowen reaffirms $290 price target on AMD, citing $1 trillion AI addressable market and over 60% compound annual growth in data center business
- AMD’s EPS target exceeds $20 with OpenAI deal dilution factored in, while Wall Street sees 22.4% upside potential
- Nvidia loses ground as earnings growth moderates after two-year AI dominance, with investor focus shifting to AMD and Broadcom
- AMD advances Helios rack-scale expansion for H2 2026 with ROCm software promising 10x performance improvement
Advanced Micro Devices captured the spotlight this week as analysts shifted their focus from Nvidia to AMD. Citi analyst Christopher Danely identified the chipmaker as having the strongest momentum in the semiconductor sector.
Advanced Micro Devices, Inc., AMD
The changing sentiment marks a turning point in the AI chip race. Investors now favor AMD based on expectations for higher earnings-per-share growth through 2027.
Danely’s assessment came after AMD’s recent analyst event. Updated revenue and margin targets reinforced confidence in the company’s long-term trajectory.
Nvidia dominated the AI chip market for nearly two years. However, Danely observed that investor conversations revealed AMD becoming more preferred as Nvidia’s earnings growth begins to slow.
The preference shift extends beyond just AMD. Broadcom maintained strong portfolio positions, though some investors expressed concerns about visibility on merchant tensor processing unit upside.
Wall Street Backing Strengthens
TD Cowen analyst Joshua Buchalter maintained his Buy rating with a $290 price target. The rating followed discussions with AMD’s CFO Jean Hu and CVP of Financial Strategy Matt Ramsay.
Buchalter acknowledged AMD faces challenges scaling its AI business. Yet he remains optimistic about the company’s ability to capture value in the expanding AI market.
Management highlighted a $1 trillion AI addressable market during Financial Analyst Day. This figure covers GPUs, CPUs, and server-side networking including DPUs and NICs.
Buchalter noted the market size likely includes minimal China opportunity. AMD’s revenue targets exclude China business due to geopolitical uncertainty, projecting over 60% compound annual growth in data centers.
Financial Projections and Technical Progress
AMD confirmed its EPS target of over $20 accounts for full share dilution from the OpenAI deal. This represents approximately 160 million shares without additional dilution factored in.
TD Cowen’s models project earnings exceeding $14 in 2028. The firm forecasts earnings above $24 by 2030.
The company addressed concerns about rack-scale expansion. Management outlined multiple risk-reduction steps for the Helios ramp scheduled for second half 2026.
AMD conducted intensive supplier and customer discussions. The company tested components thoroughly and moved to double-wide racks for improved design and serviceability.
Management reported strong ROCm software progress. The platform expects to deliver 10x performance gains from MI355 to Helios.
Intel attracted renewed interest around foundry strategy and server CPU improvements. Danely noted profitability challenges persist for the company.
Analog chip sentiment remained weak except for Analog Devices. Some investors questioned the sustainability of recent enthusiasm around Micron and semiconductor equipment manufacturers.
Wall Street maintains a Moderate Buy consensus on AMD stock with 27 Buys and 10 Holds. The average price target of $281.78 suggests 22.4% upside potential, with shares up 91% year-to-date.
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