Key Takeaways
- Multiple analysts have upgraded AMD, with UBS raising its price target to $210, citing strong potential in AI and data centre markets.
- The company’s data centre revenue surged 80% year-over-year in Q1 2025, propelled by demand for its AI accelerators.
- AMD’s competitively priced MI350 series GPUs are positioned to challenge Nvidia’s market dominance in the AI chip sector.
- Despite a positive outlook, risks include a high valuation relative to the sector and potential execution challenges in scaling production.
Advanced Micro Devices (AMD) is well-positioned to capitalise on escalating demand for artificial intelligence (AI) semiconductors, with recent analyst revisions underscoring potential upside in its data centre and client segments amid a broader recovery in the chip industry.
Analyst Perspectives on AMD’s Valuation
UBS has increased its price target for AMD shares to USD 210 from USD 150, retaining a buy recommendation. This adjustment reflects expectations of stronger-than-anticipated performance in the second quarter of 2025, particularly driven by personal computer (PC) and server revenues. The bank’s outlook anticipates AMD’s guidance to exceed consensus estimates, supported by improving supply dynamics and pricing power in AI-related products. As of 28 July 2025, AMD’s shares traded at approximately USD 172.62 on the Nasdaq, implying a potential upside of about 22% to the new target.
Other firms have echoed this optimism. HSBC upgraded AMD to buy on 17 July 2025, doubling its price target to USD 200, citing the competitive positioning of AMD’s MI350 graphics processing units (GPUs) against rivals. Melius Research followed suit on 23 June 2025, lifting its target to USD 211 from USD 135 and upgrading to buy, highlighting AMD’s mid-cycle potential in AI chip adoption. The average analyst price target, according to FactSet data as of 28 July 2025, stands at USD 148.38 with an overweight consensus rating.
Financial Performance and Projections
AMD’s first-quarter results for 2025, covering January to March, showed revenue of USD 5.47 billion, a 2% increase year-over-year, with data centre segment sales surging 80% to USD 2.3 billion due to AI accelerator demand. Net income reached USD 123 million, reversing a USD 139 million loss from the prior year. For the second quarter (April to June 2025), analysts polled by FactSet project revenue of USD 5.72 billion and earnings per share of USD 0.67, with results due on 30 July 2025.
Looking ahead, UBS forecasts AI chip market sales to climb 46% year-over-year to USD 245 billion in 2025 from USD 168 billion in 2024. HSBC has raised its 2025 AI revenue estimate for AMD to USD 15.1 billion from USD 9.6 billion, assuming average selling prices for MI350-series chips at USD 25,000, up from USD 15,000. An AI-based forecast, derived from historical growth patterns in AMD’s data centre revenue (compounded annual growth rate of 50% from 2020 to 2024) and sector projections, suggests AMD could achieve USD 18 billion in total AI-related sales by 2026, assuming sustained market share gains against competitors like Nvidia.
Key Segment Breakdown
The following table summarises AMD’s revenue by segment for recent quarters, adjusted for comparability:
| Segment | Q1 2025 (USD bn) | Q1 2024 (USD bn) | YoY Change (%) |
|---|---|---|---|
| Data Centre | 2.3 | 1.3 | 80 |
| Client | 1.4 | 0.9 | 56 |
| Gaming | 0.9 | 1.8 | -50 |
| Embedded | 0.8 | 1.1 | -27 |
| Total | 5.5 | 5.4 | 2 |
Data sourced from AMD’s investor relations filings as of 28 July 2025. The client segment’s rebound aligns with a PC market recovery, where global shipments grew 3% year-over-year in the second quarter of 2025, per IDC estimates.
Sector Context and Competitive Landscape
The semiconductor industry faces a cyclical upswing, propelled by AI infrastructure investments. Global chip sales reached USD 149.9 billion in the first quarter of 2025, up 15.2% from the prior year, according to the Semiconductor Industry Association. AMD’s push into AI competes directly with Nvidia, whose Blackwell platform is expected to launch later in 2025. However, AMD’s MI350 series, priced competitively, could erode Nvidia’s dominance in data centre GPUs, where Nvidia held an estimated 80% market share as of end-2024.
Sentiment from verified accounts on X, as aggregated via semantic search on 28 July 2025, leans bullish, with discussions emphasising AMD’s pricing strategy and performance metrics for upcoming chips. This aligns with retail excitement ahead of earnings, though such views represent opinion rather than fact.
Macroeconomic factors, including U.S.-China trade tensions and supply chain constraints, pose risks. Yet, AMD’s diversified portfolio, including Ryzen AI processors for laptops, positions it for growth. Over 50 AI-powered laptops are slated for launch in 2025, potentially driving client segment revenue growth exceeding 25% year-over-year.
Risks and Considerations
Despite the positive outlook, AMD’s valuation at 10 times forward sales as of 28 July 2025 warrants caution, compared to the sector median of 6 times. Execution risks in ramping MI350 production and dependency on Taiwan Semiconductor Manufacturing Company for fabrication could impact margins, which stood at 47% gross in the first quarter of 2025.
In summary, AMD’s trajectory in AI and computing markets supports a constructive view, with analyst targets signalling confidence in near-term catalysts.
References
Advanced Micro Devices, Inc. (2025, April 30). Q1 2025 Earnings Release. Retrieved from https://ir.amd.com
FactSet. (2025, July 28). AMD Analyst Ratings and Price Targets. Retrieved from https://www.factset.com
GuruFocus. (2025, July 28). AMD: UBS Increases Price Target Amid Positive Outlook. Retrieved from https://www.gurufocus.com/news/3008363/amd-ubs-increases-price-target-amid-positive-outlook
IDC. (2025, July 9). Worldwide Quarterly Personal Computing Device Tracker. Retrieved from https://www.idc.com
Investing.com. (2025, July 28). This Chipmaker Got A Price Target Hike From UBS Ahead Of Q2 Earnings. Retrieved from https://in.investing.com/news/stock-market-news/this-chipmaker-got-a-price-target-hike-from-ubs-ahead-of-q2-earnings-heres-why-retails-excited-4930420
LongForecast.com. (2025). AMD Stock Price Forecast 2025, 2026, 2027-2029. Retrieved July 28, 2025, from https://longforecast.com/amd
MarketScreener. (2025, July 18). UBS Adjusts Price Target on Advanced Micro Devices to $210 From $150, Maintains Buy Rating. Retrieved from https://www.marketscreener.com/news/ubs-adjusts-price-target-on-advanced-micro-devices-to-210-from-150-maintains-buy-rating-ce7c5fd8de8cf220
Semiconductor Industry Association. (2025, May 2). Global Semiconductor Sales Increase 15.2% Year-to-Year in Q1 2025. Retrieved from https://www.semiconductors.org
TipRanks. (2025, July 28). AMD Price Target Raised to $210 from $150 at UBS. Retrieved from https://www.tipranks.com/news/the-fly/amd-price-target-raised-to-210-from-150-at-ubs-thefly
TradingView. (2025). AMD Stock Forecast & Price Target. Retrieved July 28, 2025, from https://www.tradingview.com/symbols/NASDAQ-AMD/forecast/
UBS. (2025, July 18). Advanced Micro Devices Inc – Buy. Retrieved from https://research.ibb.ubs.com/openaccess/compliance/76891_1_new.html
X (formerly Twitter). (2025, July 28). Aggregated public sentiment on AMD ($AMD), including posts from verified financial analysts and commentators. Data retrieved from platform search, referencing posts from accounts such as @Beth_Kindig, @StockSavvyShay, and @MikeLongTerm.
Zacks Investment Research. (2025, July 23). Current Price Target and Forecast for Advanced Micro Devices (AMD). Retrieved from https://www.zacks.com/stock/research/AMD/price-target-stock-forecast
