Advanced Micro Devices (AMD) stock closed at $519.85 on June 23, down 5.76%. The stock was caught in the tech sector sell-off, as reported by Yahoo Finance.This drop is probably just a small hiccup, given how the stock has performed over the longer time frame and the bullish analyst consensus.The stock has gained 11.2% in the past month as of Wednesday morning, June 24.AMD’s main competitors in the AI space, Nvidia (NVDA) and Broadcom (AVGO), lost 7.1% and 8.21%, respectively, over the past month, suggesting AMD is doing fairly well.Key news items for AMD stock:Bank of America revised its server CPU sales forecasts in April.AMD reported strong earnings on May 5, and Goldman Sachs raised its price target for the stock.AMD confirmed investments exceeding $10 billion in the Taiwan manufacturing ecosystem.The company ramped up production of its next-generation EPYC Processor.Gartner believes AMD is the current front-runner for AI server CPUsRegarding analyst opinions, we can look at what UBS analyst Timothy Arcuri thinks, as he released his latest research note, according to Investing.
UBS raised AMD stock price target.Cebbi/Pixabay
UBS raises AMD stock price targetArcuri is one of the analysts with the best track records. His TipRanks profile shows he ranks first out of 12,314 Wall Street analysts, with an 81% success rate and an average return of 62.3%.The analyst believes AMD will gain additional market share in the standalone CPU rack segment. The main advantage of AMD is its high CPU core counts. He raised AMD’s CPU server revenue forecasts for calendar years 2027 and 2028 to $23 billion and $29 billion from $21 billion and $27 billion, respectively.More tech stocks:AMD analyst sees something beyond Nvidia’s shadowMorgan Stanley resets Nvidia stock forecast after key eventBank of America resets Broadcom stock price target after earningsArcuri estimates that in the CPU space, the x86 architecture (on which AMD’s CPUs are built) will capture 60% of the standalone racks segment of the market, with the rest going to ARM-based CPUs. He believes that AMD has an opportunity to capture an outsized share of incremental demand due to Intel’s roadmap and supply challenges.Arcuri reiterated a buy rating for AMD stock and raised the price target to $670 from $455, based on an unchanged 35x multiple. That price target represents a very high upside of 28.88%.What do other analysts think, and how does Arcuri’s opinion compare? According to MarketBeat, 30 of the 43 analysts covering AMD stock rate it a buy. Twelve give a hold rating, one gives it a sell rating. The average price target is $430.68.We can see that he is very bullish on AMD, and we should look at what someone a little less bullish thinks.What Bank of America thinks about AMDIn his most recent research note, shared with me on June 11, Bank of America analyst Vivek Arya and his team updated their server CPU total addressable market (TAM) forecast and raised their price target for AMD stock.Arya ranks 70th, with a 64% success rate and an average return of 32.0%.The team raised its 2030 server CPU TAM estimate to $170 billion or more from $125 billion. This represents nearly five times growth and a 37% compound annual growth rate (CAGR) over the period from 2025 to 2030.The team estimates AMD’s market share at 25% to 27% through 2030, driven by AMD’s performance lead at the high end, but offset by the relatively stronger ramp-ups of ARM-based processors launching in 2027.Bank of America analysts also noted that AMD’s main advantage in the CPU space will be high core counts.Arya reiterated a buy rating for AMD stock and raised the target price to $560 from $500, based on a 42x multiple of his 2027 non-GAAP EPS estimate.He noted that AMD’s historical multiple range is 13 to 58, and he believes his multiple is supported by AMD’s potential annual EPS CAGR of 50% or more and its AI CPU/GPU share-gain potential.Analysts noted downside risks for AMD:Execution on the first rack-scale product (MI400 Series).Timing/magnitude of Middle East AI projects.The lumpy nature of consumer and enterprise spending could delay the acceptance and success of new products.Heavy reliance on a single outsourced manufacturing partner.Maturity of the current game console cycle.AMD’s upside potential:Greater share-gain potential in the PC and server processor market compared to competitors.AMD’s current price is quite above the average price target, but the latest research notes show the trend of analysts slowly revising their total addressable market estimates for AI data center build-out. Agentic AI is increasing demand for CPUs (along with GPUs), prompting analysts to raise their estimates for AMD. That is to say, it is very likely that the average price target will soon catch up with the trading price.Related: Bank of America resets Intel stock price target