Bank of America revamps AMD stock price target for 2026

One of them is starting to look different, and Bank of America conscionable made that lawsuit successful writing.

Bank of America expert Vivek Arya, who covers semiconductors for the firm, spent July 23 successful San Francisco watching AMD marque its astir ambitious AI transportation to date. By the pursuing morning, helium had a caller terms nonsubjective and a importantly expanded presumption of however ample AMD's AI marketplace accidental could become.

The slope raised its terms nonsubjective connected AMD to $620 from $560, reiterating a bargain rating, with AMD shares trading astatine $554.23 connected July 24. But the much important portion of the enactment isn't the number. It's however the slope is present describing AMD's spot successful the AI market.

How Bank of America is reframing AMD's AI marketplace position

The connection Bank of America utilized successful the enactment is worthy paying attraction to. The slope said AMD has "successfully transitioned from a merchant GPU vendor to a full-stack, rack-scale accelerator systems supplier."

That's a meaningful distinction. AMD is nary longer being compared lone to Nvidia connected chip-by-chip specifications. It's being evaluated arsenic a systems-level rival with an integrated hardware and bundle offering.

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Analyst Vivek Arya acceptable the $620 terms nonsubjective astatine 47 times the bank's 2027 estimated non-GAAP net per share, toward the mediate to precocious scope of AMD's humanities 13x-to-58x multiple. He said that aggregate is supported by AMD's imaginable for 50% oregon higher yearly EPS maturation and its stock gains successful AI CPUs and GPUs.

AMD besides updated its full addressable marketplace forecasts astatine the event. The institution present targets a full compute marketplace of much than $2 trillion by 2030, up from a anterior estimation of $1 trillion.

Its AI accelerator TAM estimation roseate to $1.4 trillion from $500 billion, and its server CPU TAM people accrued to $220 cardinal from $120 cardinal earlier this year, Investing.com reported.

Why AMD's Helios rack is cardinal to the Bank of America thesis

The merchandise astatine the halfway of the upgraded thesis is AMD's Helios rack, which the slope said is present successful afloat accumulation with deployments opening successful the 3rd 4th and ramping into the fourth. Each rack integrates 72 MI455X GPUs with 18 EPYC Venice CPUs, Pensando networking chips, and ROCm bundle support. AMD's displacement into afloat rack-scale AI systems has been gathering each year, arsenic TheStreet reported.