Wells Fargo and Mizuho Boost $AMD and $NVDA Price Targets Amid AI Surge

The semiconductor sector continues to draw significant attention in 2025, with Advanced Micro Devices (AMD) and Nvidia (NVDA) benefiting from upward revisions in price targets by major financial institutions. This reflects a growing confidence in their ability to capitalise on the accelerating demand for artificial intelligence (AI) and data centre solutions. Notably, recent updates from analysts at Wells Fargo and Mizuho, as discussed in broader market commentary on platforms like X, underscore a bullish outlook for both companies, driven by distinct but complementary growth narratives. This analysis delves into the factors behind these revisions and evaluates their implications for investors in the context of current market dynamics.

AMD: A Dual Boost from Wells Fargo and Mizuho

AMD has seen its price target lifted significantly by Wells Fargo to $185 from a previous level, maintaining an Overweight rating as of July 2025. Simultaneously, Mizuho has adjusted its target for AMD to $175, up from $152, with an Outperform rating. These upgrades are underpinned by AMD’s strengthening position in the AI accelerator market, where demand from hyperscalers for alternative GPU suppliers remains robust. Despite trailing Nvidia in software capabilities, AMD’s MI355X chips are expected to see a stronger ramp-up in the second half of 2025, a key factor cited in Mizuho’s revised valuation multiple of 25.9x fiscal 2026 earnings, up from 18.6x previously.

Financially, AMD’s outlook aligns with these optimistic projections. Consensus estimates for Q2 2025 (April to June) peg revenue at $7.40 billion, with earnings per share at $0.49. For the full fiscal year 2025, revenue is projected at $31.8 billion, with earnings per share at $3.94. These figures suggest steady growth, bolstered by AMD’s expanding data centre segment, which is increasingly critical as enterprises pivot to AI-driven workloads. The company’s ability to capture market share in this space will be pivotal, particularly as it navigates competitive pressures and software ecosystem challenges.

Nvidia: Mizuho’s Continued Confidence in Market Leadership

Nvidia, the undisputed leader in AI and GPU technology, has also received a price target increase from Mizuho to $192, up from $185, as of July 2025, with an Outperform rating sustained. This adjustment reflects Nvidia’s entrenched position in the data centre and AI markets, where its hardware and software integration continues to set the benchmark. The company’s ability to meet soaring demand for AI chips, even amidst geopolitical constraints such as export restrictions to China, further solidifies its outlook. Recent reports indicate Nvidia’s intent to ramp up supply of compliant chips for the Chinese market in the coming months, a move that could offset some regulatory headwinds.

Nvidia’s financial performance remains staggering. For Q1 2025 (January to March), the company reported revenue of $26.0 billion, a significant leap from $7.6 billion in Q1 2023, driven by a 427% year-over-year surge in data centre revenue. Looking ahead, analysts project fiscal 2026 data centre revenue to exceed $126 billion, building on estimates of $93.2 billion for fiscal 2025. These figures highlight Nvidia’s unparalleled growth trajectory, even as competitors like AMD attempt to close the gap.

Comparative Valuation and Market Implications

To contextualise these price target upgrades, a comparison of AMD and Nvidia’s forward valuations and growth metrics is instructive. The table below outlines key data points based on consensus estimates for fiscal 2025 and analyst revisions as of July 2025.

While Nvidia commands a higher forward price-to-earnings ratio, its superior revenue growth and data centre dominance justify the premium. AMD, on the other hand, offers a relatively more accessible entry point for investors seeking exposure to AI-driven semiconductor growth, albeit with higher execution risks tied to software development and market share gains. Both companies face a macroeconomic environment that, while supportive of tech spending, is not without pitfalls—supply chain constraints and geopolitical tensions remain ever-present concerns.

Sectoral Tailwinds and Risks

The broader semiconductor industry is riding a wave of structural growth, with AI and machine learning workloads fuelling unprecedented demand for high-performance computing. Global data centre spending is projected to grow at a compound annual rate of 15% through 2030, a trend that directly benefits both AMD and Nvidia. However, the competitive landscape is intensifying, with Intel and smaller players vying for a slice of the AI pie, often at lower price points. Additionally, any slowdown in hyperscaler capital expenditure—a key driver of GPU demand—could temper growth expectations.

For Nvidia, regulatory scrutiny over exports to key markets like China poses a unique challenge, though its adaptability in developing compliant products mitigates some of this risk. AMD, meanwhile, must accelerate its software ecosystem development to match Nvidia’s CUDA platform, a gap that continues to hinder broader adoption among developers. Investors would be wise to monitor these dynamics closely, as they could influence the sustainability of current valuations.

Conclusion: A Measured Optimism

The upward revisions in price targets for AMD and Nvidia by Wells Fargo and Mizuho reflect a well-founded optimism in their growth prospects, particularly within the AI and data centre arenas. AMD’s trajectory suggests a compelling opportunity for those betting on a challenger catching up, while Nvidia’s dominance offers a safer, albeit pricier, play on the sector’s expansion. Both companies are well-positioned to benefit from enduring technological shifts, though not without risks that warrant vigilance. As the semiconductor landscape evolves, these firms remain at the forefront—a testament to their innovation, even if the road ahead is unlikely to be entirely smooth.

References

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