Even though AMD’s (AMD) third-quarter results and guidance topped estimates, the recent run-up in the stock left some investors wanting more from the Dr. Lisa Su-led company.
Wall Street’s advice? Wait until 2026.
Wedbush Securities analyst Matt Bryson — who has an Outperform rating and $290 price target on AMD — said much of the company’s valuation is built on its ability to execute its artificial intelligence strategy, which is set to ramp in the back half of 2026. This is when its deal with OpenAI (OPENAI) is slated to go into effect.
“With management providing less visibility into how server CPU growth compared relative to AI, it’s a bit tricky to understand which segment was responsible for more of the datacenter outperformance,” Bryson wrote. “But, we would also argue the more opaque nature of AMD revenues is something of a red herring as AMD’s valuation is predicated largely upon MI450 (and future MI iteration) sales and we don’t necessarily view one or two hundred million more or less in MI350 revenue as offering much insight into AMD’s execution around MI450. Net, we believe any color AMD offers around its future AI expectations at its Analyst Day next week, will arguably be more impactful for the stock, vs. what we learned from earnings.”
HSBC analyst Frank Lee had a similar takeaway, in that the “bullish” AI narrative is still intact, but next year and 2027 is when things will really ramp up for AMD.
“We had highlighted that the OpenAI deal could result in an AI GPU revenue opportunity more than 10x above 2025e levels,” Lee wrote in a note to clients, adding that AMD management “mirrored this view,” as it believes it could generate $100B in revenue from OpenAI.
However, with roughly 59% of revenue still coming from non-AI areas going into 2026, and the prospect that Taiwan Semiconductor (TSM) could raise prices on advanced nodes, AMD may feel some margin pressure to start the year, Lee added.
Lee maintained his Buy rating, but slightly lowered his price target to $300 from $310.
Bank of America analyst Vivek Arya said that the second-half of next year is the “real catalyst” and told investors to “ignore [the] quarterly noise till then.”
“We believe if AMD’s projects with OpenAI come through, there is potential to nearly ~5x data center GPU sales towards $30bn in CY27E form ~$6.2-$6.4bn in the current year,” Arya, who has a Buy rating and $300 price target on AMD, wrote. “While bears will fixate on the modest near-term upside, we believe the real growth trend for AMD is based on execution in its rack-scale architecture and expanding its ~3-4% current share in the rapidly growing AI market.”