AMD’s Data Center Business Doubled and Our Price Target Shows Why
AMD's data center sales exploded while the stock slipped, and retail investors are scratching their heads. Here is why the math behind the confusion points to a very specific price target.
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AMD (NASDAQ:AMD | AMD Price Prediction) posted Q2 revenue growth of 50.11% to $11.536 billion, with Data Center more than doubling, yet a Reddit thread titled “AMD’s revenue climbs 50% and data center sales doubled, but the stock is down” captured retail confusion. That gap between fundamentals and price action is where our model finds an edge.
Our 24/7 Wall St. price target for AMD is $639.64, implying 23.35% upside from the $518.58 close on August 4, 2026. The recommendation is buy with high confidence.
24/7 Wall St. Price Target Summary
| Metric | Value |
|---|---|
| Current Price | $518.58 |
| 24/7 Wall St. Price Target | $639.64 |
| Upside | 23.35% |
| Recommendation | BUY |
| Confidence Level | 90% |
A Rally, a Pause, Then a Push Higher
AMD is up 142.15% year to date and 193.35% over the past year, adding 14.07% in the last week. The stock sits roughly 1% below its 52-week high of $584.73, well off the $149.22 low.
Q2 delivered non-GAAP EPS of $1.66 against a $1.6107 estimate, with Data Center revenue at $6.718 billion, up 107% year over year. Q3 guidance sits at roughly $13 billion, or 41% YoY growth.
Why Bulls See a Breakout Ahead
The bull case rests on signed customers. Anthropic committed to up to 2 gigawatts of MI450 Series GPUs in Helios racks, OpenAI has a 6 GW arrangement, and Meta is designing custom MI450-based silicon. Microsoft Azure is expanding Helios deployments alongside a new EPYC VM series.
CEO Lisa Su told investors: “We enter the second half with strong momentum as EPYC demand accelerates, Instinct deployments scale and Helios begins to ramp.” The bull-case scenario points to $665.57, supported by analyst consensus of $579.11 and 41 Buy or Strong Buy ratings.
The Risks Worth Watching
Bears point to valuation: trailing P/E of 162x and forward P/E near 66x. Gaming revenue fell 31% YoY, free cash flow declined 9.89% despite booming net income, and Q2 Data Center revenue landed at $6B versus a crowd-implied $6.86B.
The counterfactual: FCF weakness reflects a 186.52% capex surge to build AI capacity. The bear scenario still lands at $488.04, a modest -5.89%.
How AMD Compares to NVIDIA and Intel
NVIDIA (NASDAQ:NVDA) is the direct AI GPU competitor. NVIDIA trades at a forward P/E of 23x with a 63% profit margin and 114% ROE. AMD’s forward P/E near 66x is a heavy premium, but AMD is the accelerating challenger with a lower base, which justifies the multiple.
Intel (NASDAQ:INTC) is the x86 and data center rival losing share to AMD. Intel posts trailing EPS of -$2.09, operating margin of 12.2%, and forward P/E of 71x on depressed forward earnings. AMD’s 27% non-GAAP operating margin makes the peer set look like a growth-versus-turnaround contrast, validating our $639.64 target.
AMD Price Projection 2026-2030
The 24/7 Wall St. price target is $639.64, the recommendation is buy, and confidence is 90%. Data Center is the tipping factor: 58% of revenue, doubling annually, backed by named hyperscaler contracts.
The setup looks constructive if MI450 ramps on schedule in H2 2026. The thesis weakens if Data Center growth cools below 60% YoY or export controls widen.
| Year | 24/7 Wall St. Price Target |
|---|---|
| 2026 | $639.64 |
| 2027 | $725 |
| 2028 | $810 |
| 2029 | $895 |
| 2030 | $968.92 |
These projections assume AMD executes on Helios deployments and MI450 ramps as guided. Significant upside or downside could come from AI capex cycles and export policy changes.
Contact [email protected] for any questions or corrections.
Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.
Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.
When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.
