AMD’s Data Center Sales Nearly Doubled and the Stock Is Jumping. Where Does the Price Target Go Now?
AMD posted a record quarter, and the stock rocketed past our price target before the opening bell. With a rich valuation and thin cash flow, can the rally hold, or has the easy money already been made?
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AMD (NASDAQ:AMD | AMD Price Prediction) closed at $483.90 before it reported a record quarter. The 24/7 Wall St. price target is $514.18 over the next 12 months. That is 6.26% upside from the close, and our model rates the stock a buy.
| Metric | Value |
|---|---|
| Price (Nov. 3 Close) | $483.90 |
| 24/7 Wall St. Price Target | $514.18 |
| Upside | 6.26% |
| Recommendation | BUY |
| Confidence Level | 90% |
A 90% confidence reading means our model’s inputs agree closely with one another. As a caveat, shares were trading at $517.63 premarket, up 6.97%. That price already sits a little above our target, so most of the 12-month upside we forecast has arrived overnight.
Why We Could Be Wrong
AMD now expects 2027 revenue to grow more than 80%, and server revenue to double. If it delivers, our target will look too low. Treat it as one datapoint among many. The bull case below lays out how AMD could beat our model.
Data Center Hits 64% of Revenue After a Brutal Month
The stock came into earnings beaten up. It fell 18.34% over the past month and 7.61% over the past week. It is still up 141.7% year to date and trades 21% below its 52-week high of $658.52.
Revenue reached $13.377 billion, up 44.68% and above the $13.085 billion estimate. Non-GAAP EPS of $2.09 beat the $1.9366 consensus. Data Center sales of $8.546 billion rose 97% and made up 64% of total revenue. Reuters reported that the forecast eased AI spending fears.
Why Bulls See $682 and Beyond
Management guided fourth-quarter revenue to about $17 billion, around 66% growth. Helios racks are running with Anthropic, Meta, Microsoft, OpenAI and Oracle. Lisa Su said “demand is higher than supply.”
Of the analysts covering the stock, 44 rate it a Buy or better and none rate it Sell. Our bull case reaches $682.33.
Cash Flow and Supply Risks Worth Watching
Free cash flow fell 70.86% to $554 million. Inventory rose to $11.463 billion, and Gaming sales dropped 40%. In fairness, the inventory build is there to supply 2027 data center ramps. The $1,097 million warrant charge behind GAAP EPS of $1.46 is non-cash. Export rules and TSMC dependence remain real risks. The bear case is $410.75.
How AMD Compares to NVIDIA and Broadcom
AMD’s direct rival in AI GPUs is NVIDIA (NASDAQ:NVDA). It grew Data Center revenue 117% to $89.023 billion, yet trades at just 42x trailing earnings. AMD trades at 182x. That gap explains why our model leans on forward earnings for AMD.
Broadcom (NASDAQ:AVGO) competes through custom AI chips. Its AI semiconductor revenue jumped 221%, and it produced $13.665 billion of quarterly free cash flow. Both peers turn more of their sales into cash today. Against them, our target looks reasonable.
Our Verdict: Data Center Momentum Earns the BUY
Our 24/7 Wall St. price target remains at $514.18, with a buy rating at 90% confidence. What tips the scale is guidance pointing to growth of more than 80% in 2027.
Key signals to monitor are whether Helios and Venice keep ramping on schedule and whether supply limits or cash burn delay those ramps.
| Year | 24/7 Wall St. Price Target |
|---|---|
| 2026 (12-month) | $514.18 |
| 2027 | $532.67 |
| 2028 | $560.58 |
| 2029 | $592.56 |
| 2030 | $622.53 |
These base-case projections assume AMD keeps executing on its current strategy. A sustained win in AI GPU share could add significant upside. Export restrictions or a slowdown in hyperscaler spending could produce significant downside.
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.
