A few months after Nvidia’s advances in AI chips, AMD might finally be on the upswing. Earlier this year, AMD’s stock faced challenges due to uncertainty in its competitive standing. However, recent developments about their technology and a warming market have led Wall Street to reconsider AMD’s long-term prospects in the thriving AI sector.
On June 12, the company held a developers’ conference titled “Advancing AI” in San Jose, California, where it unveiled the MI400 series AI chips aimed to rival not just its own MI350 series, but also Nvidia’s offerings. CEO Lisa Su indicated that the MI350 is outperforming Nvidia’s models, according to a report by Bloomberg.
Initially, Su had projected that the AI accelerator market could reach $500 billion in revenue by 2028. Now, though, she believes this figure might be on the low side. “People once thought $500 billion was a huge amount,” she remarked, “but it appears to be within reach now.”
In just the last week, AMD’s stock has seen a rise of 11.5%.
On May 6, AMD reported stronger-than-expected results for the first quarter and provided optimistic forecasts for the following quarter, even in light of export restrictions related to AI chip sales, particularly concerning China. They reported adjusted earnings of 96 cents a share with revenues of $7.444 billion, which, while below analysts’ expectations, included a $3.7 billion success in their data center sales, which marked a 57% increase year-over-year.
According to CEO Su, despite facing challenges from macroeconomic and regulatory factors, they believe these hurdles are outweighed by the advantages of their strong product portfolio. In May, AMD announced a collaboration with a Saudi Arabian AI startup known as Humain to develop a $10 billion AI computing infrastructure over the next five years, a move that should enhance its foothold in the AI chip market.
This series of positive developments has given AMD a much-needed boost, especially as their inventory has faced difficulties. In 2024, AMD saw about an 18% drop in stock as investors worried about its capacity to keep pace with Nvidia, the leading competitor in the AI GPU domain. The first four months of 2025 witnessed another nearly 20% decline due to broader tariff-related concerns and questions about the sustainability of demand for high-priced AI GPUs.
Interestingly, Cathie Wood, head of ARK Investment Management, increased her investment in AMD recently, purchasing a significant number of shares amounting to about $36.9 million over several days in June.
Analysts from Melius Research have recently upgraded AMD’s shares to a buy, with a target price ranging from $110 to $175, suggesting that conditions have improved notably since the start of the year. They predict that AMD’s GPU sales will climb from 2026 to 2028.
AMD’s roadmap for its GPUs, especially the upcoming MI400 series, continues to attract global attention, with predictions of earnings per share potentially exceeding $8 in the next couple of years. Last week, Piper Sandler raised its price target for AMD from $125 to $140, reiterating its favorable outlook, citing high demand for the company’s GPUs.
As it stands, AMD shares closed at $129.58, up about 7.3% since the beginning of the year.
