Gartner Just Called AMD the Company to Beat – Here’s Why

TLDR

• AMD stock rose 2.5% Thursday, hitting an intraday high of $550.88 before settling at $532.57
• UBS raised its price target to $670; Gartner named AMD “the company to beat” in enterprise AI server CPUs
• Q1 revenue hit $10.25 billion, up 37.8% year-over-year, beating estimates
• AMD trades at a forward P/E of 71x vs Nvidia’s 23x — valuation remains a talking point
• Upcoming MI450 chip, built on TSMC’s 2nm process, is expected to challenge Nvidia’s Vera Rubin platform

Advanced Micro Devices stock moved up 2.5% on Thursday, trading as high as $550.88 and last changing hands at $532.57. The prior close was $519.74. Volume came in at around 26.7 million, roughly 29% below the daily average of 37.7 million.

Advanced Micro Devices, Inc., AMD

The move happened on lighter-than-normal trading, suggesting it wasn’t a broad momentum push. That said, the catalyst was clear: a string of bullish analyst notes.

UBS reportedly raised its price target on AMD to $670. Separately, research firm Gartner called AMD “the company to beat” for enterprise AI server CPUs — a headline that got attention across the market.

Wall Street’s overall stance on AMD leans positive. Of the analysts tracked by MarketBeat, 28 have a Buy rating, 12 a Hold, two Strong Buy, and one Sell.

The average price target sits at $440.41, though several recent updates have pushed targets higher. Mizuho lifted its target to $615 and TD Cowen moved to $600, both with bullish ratings.

AMD’s Q1 results, reported May 5th, backed up the optimism. Revenue came in at $10.25 billion, beating the $9.90 billion estimate and up 37.8% from the same period last year. EPS was $1.37, ahead of the $1.29 consensus.

Valuation Is the Elephant in the Room

Despite strong fundamentals, AMD’s valuation has become a regular point of discussion. The stock trades at a trailing P/E of around 171x and a forward P/E of 71x. Nvidia, by comparison, trades at a forward P/E of roughly 23x.

Some analysts have flagged that AMD’s premium pricing leaves little room for error. If growth expectations slip even slightly, the stock could face pressure. One commentary piece noted that Micron’s strong earnings did little to lift AMD, pointing to a more selective market environment.

CEO Lisa Su sold 125,000 shares on June 10th at an average price of $460.69, totaling around $57.6 million. The transaction was executed under a pre-arranged 10b5-1 plan. EVP Mark Papermaster also sold 6,000 shares on June 15th at $536.33. Both sales were planned in advance, not reactive trades.

MI450 Is the Next Catalyst to Watch

AMD’s next major product moment is the upcoming MI450, which is being manufactured on TSMC’s 2-nanometer process. That’s a step ahead of Nvidia’s 3nm Vera Rubin platform.

The MI450 is expected to ship with 432 GB of HBM4 memory, compared to 288 GB for Vera Rubin. Some analysts also expect AMD to offer a lower total cost of ownership, which could matter in large-scale data center deployments.

AMD’s market cap currently stands at approximately $868 billion, a fraction of Nvidia’s $4.9 trillion. That gap is part of the bull case — there’s more room to grow from here.

AMD’s data center segment now accounts for 56% of overall revenue. Nvidia’s equivalent segment sits at 92%, underscoring how much further AMD has to go — but also the runway that remains.

Institutional ownership stands at 71.34%. Analysts forecast full-year EPS of $6.15 for the current fiscal year.

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