AMD to outperform despite post-earnings slide, Wall Street analysts say
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Advanced Micro Devices is primed to outperform even after its latest financial report failed to impress investors, analysts said. The semiconductor company posted adjusted earnings of $1.66 per share for the second quarter, coming in slightly above the $1.62 per share expected by analysts polled by LSEG. Revenue of $11.54 billion also topped the Street's consensus estimate of $11.28 billion. Despite those strong results, AMD plunged 8% in premarket trading — a sign that investors were left unimpressed by the slight top and bottom-line beat. Investors may also be concerned about whether shares have more room to run. AMD YTD mountain AMD year to date The stock has surged about 198% over the past year as AMD has deepened its push to sell the hardware that powers AI models, positioning itself as a rival to Nvidia and prime beneficiary of widening AI adoption. Yet many analysts reiterated their bullish outlooks on AMD, with Wells Fargo saying investors should feel optimistic about AMD's growth potential. "We are positive on AMD's ability to continue gaining share in the server and PC CPU markets, increasing traction in datacenter GPUs, positive / accelerating incremental operating leverage, and ultimately, earnings power in excess of +$14/share by 2027," analyst Aaron Rakers said in a recent note to clients. The analyst has an overweight rating on AMD. He raised his price target on shares to $700 from $615, implying 35% upside from Tuesday's close. Here's what others on Wall Street have to say about the semiconductor name. Bank of America: Buy, $620 "We believe the company is well set for top-line growth acceleration to +77% YoY in CY27E from +47% YoY. While the magnitude of near-term beat/raise is modest, and likely to pressure the stock near-term, we think it's immaterial as flagship Helios full-scale rack system ramp begins in earnest only from Q4. Meanwhile, gross margins are holding up despite input cost inflation and company continues to be execute flawlessly in GPU, agentic CPU and customer traction. Risks include rising exposure to unprofitable frontier labs, but AMD's deployment at public hyperscalers can help generate sustainable traction." Goldman Sachs: Buy, $640 "We believe investors were constructively positioned heading into the report given optimism around market strength and share gains in server CPUs, as well as expectations for a strong MI-4XX ramp into 2027. Despite management's strong commentary on its Datacenter business for 2027 (well over 100% growth in total, with server CPU growth over 70%), we believe the most bullish expectations were likely ahead of this level on revenue and gross margin." Barclays: Overweight, $665 "Client is holding in better than expectations in June/Sept, but the company remains cautious on the market and the segment into December is likely down MSD. Some may push back on the slight margin miss with DC CPU accelerating but we would note we expect DC GPU to outgrow CPU which is a negative mix effect. Net-net, we view AMD as attractive on any pullback." UBS: Buy, $730 "The bottom line to us is that: 1) AMD's competitive position in what is now a much larger server CPU market has never been better, 2) the data center GPU roadmap and customer engagement look like it will only get better with MI500 launching in late '27 and ramping in '28, and 3) the embedded business - while small at this point - is inflecting and carries much higher contribution margins." Citi: Buy, $575 "We maintain AMD as our top Buy-rated large cap growth compute semis pick post "beat and raise" results. AMD sees strong compute market demand in both GPUs and CPUs with server CPU biz to grow > 70% and overall DC biz to grow > 100% next year or $70B+ with GPUs in low $40Bs driven by anchor customers like Meta, Microsoft, and LLM makers." Morgan Stanley: Equal weight, $465 Analyst Joseph Moore raised his price target from $410. "Near term numbers not surprising but commentary about 2027 data center revenue 'significantly more than doubling' is certainly positive commentary vs. our 80% estimates. #s higher; we like the revenue growth but the warrant issuance tempers our enthusiasm. JPMorgan: Neutral, $550 Analyst Harlan Sur raised his price target from $385. "AMD delivered another beat and raise relative to consensus expectations, though Sep-Q guidance did land modestly below buy-side bars we heard from clients heading into the print, particularly on gross margins. Even so, to us the more significant takeaway was mgmt's framing of the growth trajectory for Data Center in CY27, which points to server CPU revenue growing > 70% Y/Y (off a much higher base) and DC segment revenue growing well over 100% Y/Y."