AMD stock price target raised to $230 from $150 at New Street Research

New Street Research raised its price target on AMD to $230 from $150, maintaining a Buy rating, citing significant momentum in its Instinct AI accelerator business, with seven of the top 10 AI firms adopting its chips. The firm projects AMD to exceed 10% GPU market share by 2029, potentially generating $34 billion in Instinct revenues and enabling 20% annual revenue growth and 40% EPS growth over four years. This optimistic outlook is reinforced by AMD's Q2 revenue beat, robust Q3 guidance, gains in PC and server CPU market share, and a 50.99% gross profit margin, leading to widespread price target increases from other analysts.

Analysis

Advanced Micro Devices (AMD) is demonstrating significant operational momentum, primarily driven by its Instinct AI accelerator business, which has prompted a series of bullish analyst revisions. New Street Research notably raised its price target to $230, forecasting that AMD could capture over 10% of the GPU market by 2029, translating to $34 billion in Instinct revenues and potential annual EPS growth of 40% over four years. This outlook is substantiated by strong adoption, with seven of the top ten AI firms using Instinct chips and lead times extending into the second quarter of 2026. The company's core business is also strengthening, with PC CPU market share rising to 27% and server CPU share reaching 40%. This is reflected in its recent financial performance, where second-quarter revenue of $7.69 billion beat consensus estimates, and its third-quarter revenue guidance of approximately $8.7 billion also surpassed expectations. The positive sentiment is widespread, with firms like Benchmark, JPMorgan, and Mizuho also increasing their price targets based on strong data center ramp-up and AI potential. While the introduction of the MI400 chip in H1 2026 is a key future catalyst, China remains a noted source of concern and potential volatility.

Key Decisions for Investors

• Investors should recognize the strong institutional conviction in AMD's AI growth trajectory, evidenced by widespread analyst upgrades and the adoption of Instinct chips by major AI firms, which supports a bullish long-term outlook.
• Given the stock's 44.31% year-to-date surge, consider the elevated valuation but weigh it against the company's projected 20% annual revenue growth and strong forward guidance, which may justify current levels for growth-oriented portfolios.
• It is crucial to monitor geopolitical developments related to China, as the company has identified this as a specific source of volatility that could impact future performance and sentiment.
• Pay close attention to execution milestones, particularly the deployment scale and market reception of the next-generation MI400 chips, which are flagged as a key catalyst for the first half of 2026.