AMD (AMD) stock has more records to come, says Citi.
Citi analyst Atif Malik raised his price target on AMD from $575 to $800 on Tuesday. Shares rose 1% in premarket trading and are expected to open at a new record high.
“Following the release of Meta Muse and our subsequent CPU TAM increase, we are increasing estimates on AMD given our belief that AMD will be the primary beneficiary of the CPU renaissance and our belief that Meta is one of the largest customers of AMD’s server business,” Malik said.
Malik also struck an optimistic tone about the future size of the processor market.
656.29 +24.54 (+3.88%)
At 11:26:26 a.m. EDT. Open market.
“We are updating our CPU model after the launch of Muse, Meta’s personal AI agent. Basically, we see agentic AI as a potential driver of several orders of magnitude of computational demand compared to traditional chatbots,” Malik added. “We believe the TAM (total addressable market) for CPUs will grow from $29 billion in 2025 to $300 billion in 2030, a CAGR of 60%. We still expect AMD to be the primary beneficiary of the CPU renaissance and Intel as a secondary beneficiary.”
AMD has seen a series of bullish catalysts in recent months.
Just two weeks ago, AMD signed a deal to acquire World Labsan AI model lab based in San Francisco that focuses on software for 3D environments. The purchase price: $8.2 billion. The transaction is expected to be finalized by the end of 2026.
World Labs was founded in 2024 and is led by Dr. Fei-Fei Li, a leading AI researcher known in tech circles as the “Godmother of AI.” She was formerly chief scientist at Google (GOOG) Cloud.
AMD beat Wall Street expectations across the board for the second quarter in early August, reporting record non-GAAP earnings per share of $1.66 versus a consensus estimate of $1.61. Total revenue jumped 50% year over year to a record $11.5 billion, beating analysts’ forecasts of about $11.34 billion.
The strong revenue and bottom line performance was fueled by the company’s Data Center segment. Revenue more than doubled year over year to $6.7 billion on strong demand for EPYC server processors and Instinct AI accelerators.
AMD forecasts server processor revenue in the second half of 2026 to grow 80% year-over-year and 70% in 2027. It expects data center revenue to more than double in 2027, with AI graphics processing unit (GPU) revenue growth well above 100%.
“The processor renaissance is playing out,” said Mark Lipacis, an analyst at Evercore ISI.
AMD also revealed its next-generation AI chips, headlined by the Instinct MI450 Series GPUs and 6th Gen EPYC Venice processors. The new chips are designed to power AMD’s new Helios rack-scale AI systems, which combine GPUs, CPUs, networking and software into an integrated platform for training and running large AI models.
Gn bussni
