5-star analyst resets AMD stock price target, but it's not about GPUs

Advanced Micro Devices, Inc. (AMD) closed the period of June astatine $580.91, up 7.68% successful the past session, and deed a caller 52-week precocious of $584, giving the institution a marketplace headdress approaching $950 billion. The banal is up 171.25% year-to-date and 309.38% implicit the past year, according to Yahoo Finance.

What I support noticing successful the 57-year-old AMD sum is that the GPU communicative tends to predominate the headlines. Looking astatine this different broadside of the server CPU story, which is arguably the much structurally important development, keeps getting underappreciated. 

The Wells Fargo analyst's latest enactment goes straight astatine that gap. The steadfast raised its AMD terms people portion maintaining its Overweight rating, citing a meaningful revision to its server CPU gross estimates. 

The afloat people and the circumstantial numbers archer the story, and I volition get into both.

Also Read: History of AMD: Timeline and Facts

What Wells Fargo's revised estimates really amusement

5-star Wells Fargo expert Aaron Rakers raised its AMD server CPU gross estimates substantially, present modeling $16.0 cardinal for 2026, $20.5 cardinal for 2027, and $25.0 cardinal for 2028, according to the firm's enactment shared with TheStreet.

Aaron Rakers is simply a 5-star expert who ranks 8th retired of 12,338 Wall Street analysts and 12th retired of 28,995 experts, with a 73% occurrence complaint and a 59.40 mean return.

The trajectory from $16 cardinal to $25 cardinal successful conscionable 2 years is an honorable reflection of a thesis that AMD's EPYC server CPU concern is entering a prolonged share-gain cycle. Not conscionable a single-product rhythm bump.

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The steadfast acceptable its caller terms people astatine $615, up from $505, utilizing a 33 times price-to-earnings aggregate connected its 2028 EPS estimation of $18.75, according to the note. Wells Fargo projects 2026 EPS of $7.15 and 2027 EPS of $13.40, implying a near-doubling of net powerfulness successful conscionable 2 years.

Data halfway GPU estimates were kept unchanged astatine $15.6 cardinal successful 2026, $40.6 cardinal successful 2027, and $63.0 cardinal successful 2028, which tells maine the steadfast is making a specifically incremental bull lawsuit connected CPUs, not conscionable riding the GPU momentum that different analysts person been emphasizing.

My work of that favoritism is this important. If the GPU numbers already bespeak the AI acceleration story, past the CPU revision is wherever the caller net upside lives. And yes. That is precisely the marketplace dynamic that makes this enactment meaningful alternatively than conscionable a regular people increase.