Advanced Micro Devices NASDAQ:AMD is well positioned to deliver another "beat and raise" quarter as demand for AI server processors continues to accelerate, according to Bank of America.
Analyst Vivek Arya lifted his price target to $620 from $550 and reiterated a Buy rating. He expects AMD to benefit from continued EPYC server share gains, strong cloud demand and improving supply visibility. The bank also expects third-quarter guidance to include the first shipments of AMD's MI455X Helios AI rack, with quarterly AI revenue potentially exiting Q4 above $6 billion to $7 billion.
AMD designs CPUs, GPUs and AI accelerators used in data centers, PCs, gaming consoles and enterprise systems. Its EPYC server processors and Instinct AI chips have become key products as cloud providers expand AI infrastructure.
Arya expects management to highlight agentic AI as another growth driver, noting AMD has one of the industry's broadest CPU portfolios for AI workloads. He also said the company's $120 billion server CPU market opportunity could increase further.