Goldman Sachs clearly isn’t sitting on the sidelines when it comes to Advanced Micro Devices (AMD) stock, given its eye-popping price target reset following earnings.The bank bumped its rating on the chipmaker to Buy from Neutral and raised its price target to $450 from $240 (a stunning 88% increase). The stunning call comes just after AMD turned in another stupendous earnings print, spearheaded by its AI-powered Data Center business. Revenues and earnings blew past expectations by comfortable margins, while its guidance points to even more upside ahead.At the core of Goldman’s view is the belief that AMD will be at the heart of the next stage of AI expansion.The opportunity in AI chips is the obvious story, but its strong server processor business tied to agentic AI is what gives the company a major edge.That also means that it can finally take a bigger cut at Nvidia’s lead, positioning it far more advantageously in the AI arms race. AMD recent earnings historyAMD has consistently posted superb revenue growth over the past four quarters, as shown below, with top-line beats in every quarter and EPS mostly coming in ahead of market estimates. FQ1 2026: EPS of $1.37 beat by $0.08, while revenue of $10.25 billion beat by $336.02 million, with YoY growth of 37.85%.FQ4 2025: EPS of $1.53 beat by $0.21, while revenue of $10.27 billion beat by $599.73 million, with YoY growth of 34.11%.FQ3 2025: EPS of $1.20 beat by $0.03, while revenue of $9.25 billion beat by $487.38 million, with YoY growth of 35.59%.FQ2 2025: EPS of $0.48 came in line, while revenue of $7.69 billion beat by $255.65 million, with YoY growth of 31.71%.
Source: Seeking Alpha.
Goldman Sachs sharply raised its AMD target after strong earnings reinforced the company’s expanding AI opportunityCaroline Brehman / AFP via Getty Images
Goldman Sachs turns bullish on AMD after earnings Goldman analyst James Schneider believes the rise of agentic AI will drive AMD’s next phase of growth and help the company narrow the gap with NvidiaMore Nvidia:Nvidia is losing an industry that saved it from bankruptcyNvidia CEO makes surprising admission on OpenAI and AnthropicGoldman Sachs just found a reason to like Nvidia stock againAccording to MarketsandMarkets, the enterprise agentic AI space alone could balloon from around $7 billion in 2025 to a whopping $46 billion by 2030 (a 47% CAGR). However, to be fair, actual traction remains mostly uneven.According to Gartner, more than 40% of AI agent projects might be canceled by 2027, and just 19% of surveyed enterprises made major investments.In fact, Gartner’s Anushree Verma put it bluntly in saying that the bulk of AI agent projects are just “early stage experiments”. Nevertheless, as AI agents become more common in businesses and in consumer applications, this will create an even more insatiable demand for compute power. That scenario creates a tremendous tailwind for AMD’s GPUs and its server CPU market.AMD stock returns vs Nvidia stockOver the past month, AMD returned 91.38%, compared with Nvidia’s 17%.Over the past six months, AMD returned 77.28%, compared with Nvidia’s 10.51%.Year to date, AMD returned 96.76%, compared with Nvidia’s 11.44%.Over the past year, AMD returned 327.29%, compared with Nvidia’s 83.09%.Over the past three years, AMD returned 369.04%, compared with Nvidia’s 625.29%.Over the past five years, AMD returned 441.01%, compared with Nvidia’s 1,334.65%.Over the past 10 years, AMD returned 11,350.82%, compared with Nvidia’s 23,929.92%.
Source: Seeking Alpha.
AMD earnings show strength beyond AI chipsThe upgrade landed right after AMD dished out another stellar earnings report.AMD’s Q1 report showed sales rising 38% from the prior-year period to $10.25 billion. Also, non-GAAP EPS surged 43% to $1.37, as the company guided Q2 sales to nearly $11.2 billion (+/- $300 million), ahead of market expectations.Perhaps the biggest standout for the tech giant was its Data Center business, which has quickly become its core growth engine.Segment-wise sales skyrocketed 57% year-over-year to $5.8 billion, led by strong EPYC server processor demand and continued ramp in Instinct AI GPU shipments, with AMD benefiting from both server demand and the relentless AI infrastructure buildout.The rest of its business held up remarkably well.Client and Gaming revenue jumped 23% to $3.6 billion, spearheaded by a superb 26% bump in client-related sales due to Ryzen processor demand and market-share gains. Gaming revenues also rose 11% on Radeon GPU demand, though custom semiconductor sales were a headwind. Additionally, its profitability improved substantially. Non-GAAP gross margin rose to 55%, while operating income increased by 43%.Looking ahead, Goldman sees strong upside for AMD’s AI accelerator business.It touted AMD’s GPU revenue opportunities in 2027 and beyond, specifically highlighting Meta Platform’s massive planned deployment of 6 gigawatts of AMD Instinct GPUs. Also, AMD is expected to maintain a stable share at Microsoft, even though visibility into OpenAI is limited. The numbers back up the bullishness as Goldman’s 2027 and 2028 EPS estimates are reportedly about 20% above the Wall Street consensus. Wall Street price targets for AMD stock post-earningsBarclays raised its price target on AMD to $500.Jefferies raised its AMD price target to $415. Wedbush raised its AMD price target to $450. Stifel raised its AMD price target to $450. KeyBanc raised its AMD price target to $530. TD Cowen raised its AMD price target to $500.
Sources: Motley Fool, Business Insider.
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