Most of the AI hype train has hit a slowdown this year.
However, AMD (AMD) clearly didn’t get the memo, as its stock continues cruising past the noise and outpacing the market.
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Once viewed as a traditional semiconductor play, AMD’s now gunning for a much bigger role in the AI arms race.
With tech stocks still under duress, AMD’s rally sticks out.
Naturally, it has triggered the usual bubble chatter. But Wall Street’s heavy hitters think it still has plenty of gas left in the tank.
Lisa Su’s AMD reinvention gains steam
Under the dynamic leadership of Lisa Su, AMD has gone from being a laggard in the AI race to becoming mission-critical in powering its infrastructure.
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Su’s “open-standards, rack-scale” strategy essentially means that AMD is building all the pieces of a data-center rack.
This robust package includes the seamless workings of its high-performance CPUs (its 5th-generation EPYC line), AI-focused GPUs (the new Instinct MI350 series), and smart network cards (Pensando NICs).
In other words, it’s offering a complete, plug-and-play stack, going toe-to-toe with the tech giants in massive server farms.
In June, AMD unveiled the Instinct MI350 accelerators, delivering roughly four times the speed of its predecessors in running and training AI models.
Additionally, the tech behemoth previewed its next big server CPU, code-named “Venice,” built on a novel 2-nanometer chip process with up to 256 cores and the latest PCIe Gen 6 connection standard.
Put simply, that means the chips fit more computing power into the same space and move data a lot quicker between different components.
However, AMD isn’t just resting on its hardware game.
AMD has leveled up its software tools in ROCm, making it easier for engineers to run AI apps on its gear.
Also, it has already landed a whopping $10 billion in commitments from major Middle East players in developing AMD-powered AI systems.
In strengthening its bull case further, AMD’s MI325X killed it in an MLPerf v5.0 showdown.
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It raced past Nvidia’s NVDA setup by fine-tuning Meta’s Llama 2-70B model 8% faster and scaling without a hitch. It’s no wonder OpenAI is already on board for 2026.
CFRA sees more upside for AMD
AMD stock went on a tear Monday, jumping 7% to close at $138.43 following CFRA’s upgrade.
The Wall Street research firm CFRA gave a major nod to AMD, pointing to new products and rising revenues.
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Analyst Angelo Zino raised his rating to strong buy from buy and upped his price target to $165 from $125. That represents a 19% upside from AMD’s current price.
In his note to clients, Zino said,
“First, we see AMD closing the competitive gap to NVIDIA (NVDA) in 2026 as it launches the MI400x and prepares to shift to rack-scale solutions, with the ZT deal complete, offering GPU sales upside. We see an expanding customer base for AMD’s accelerators (e.g., Oracle, OpenAI) while the company is also making progress with its open-source AI software stack (ROCm).”
This comes on the heels of another rating bump, with Melius Research upgrading AMD from ‘hold’ to ‘buy’.
The independent research firm hiked its price target to $175, a huge 26% upside from here.
Analyst Benjamin Reitzes highlighted rising demand from hyperscalers and sovereign players.
He sees colossal GPU revenue upside ahead, especially with inferencing workloads taking off. Even with the stock up close to 25% this year, Reitzes says AMD could be on the verge of a monumental run.
Putting things in perspective, AMD has blown past broader market gains, delivering a 10% gain over the past week and a huge 25.5% surge in the past month.
That compares to the S&P 500’s more modest gains of 1% weekly and 5% monthly. Year-to-date, AMD is up 15%, roughly quadrupling the S&P 500’s 3.6% return.
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