Santa Clara, June 23, 2025, 8:53 PM IST – Advanced Micro Devices (AMD) stock has analysts optimistic about its long-term potential, with many citing its strategic positioning in the booming AI and data center markets as key drivers. Despite a 51% drop from its March 2024 peak of $227.30, analysts see significant upside, with price targets ranging from $95 to $210 and an average of $142.03, implying a 10.75% increase from the current $128.29. Here’s why experts believe AMD has “a lot more to go” over the next few years.
AI and Data Center Growth: AMD’s data center revenue surged 94% to $12.6 billion in 2024, fueled by its Instinct MI300 AI accelerators. Analysts project AI GPU revenue to hit $7.7 billion in 2025 and $16.3 billion by 2028, with a 29% CAGR, driven by the upcoming MI350 and MI400 chips. CEO Lisa Su’s focus on an open AI ecosystem, showcased at the Advancing AI 2025 event, positions AMD to challenge Nvidia’s dominance, with partnerships like Microsoft’s Xbox and Oracle’s cloud infrastructure.
Client Segment Strength: AMD’s client revenue grew 52% in 2024, boosted by Ryzen AI processors optimized for Microsoft’s Copilot. With Windows 10 support ending, analysts expect a PC upgrade cycle to drive a 13.5% CAGR through 2029, capturing market share from Intel.
Valuation and Market Sentiment: Trading at a forward P/E of 22.5, AMD is undervalued compared to Nvidia’s 37.7, offering a compelling entry point. Melius upgraded AMD to Buy with a $211 target, citing long-term GPU upside, while Piper Sandler’s $140 target anticipates a Q4 2025 GPU “snapback.” X posts echo this, with @thexcapitalist noting AMD’s data center growth is underpriced for 2026.
Risks and Challenges: Weakness in gaming (down 58%) and embedded segments (down 33%) in 2024, plus competition from China’s DeepSeek AI model, pose risks. Software challenges with AMD’s ROCm platform lag behind Nvidia’s CUDA, but analysts remain confident in AMD’s innovation pipeline.
With robust Q1 2025 earnings ($0.93 EPS expected) and strategic acquisitions like ZT Systems, analysts see AMD poised for a rebound, potentially reaching $200 within two years, driven by AI and CPU market gains.
