Why Oppenheimer Thinks AMD Stock Can Gain 34%

TLDR

• Oppenheimer upgraded AMD to Outperform and set a $600 price target.
• AMD traded at $455.49 premarket, up 1%, while Nvidia fell 5% to $176.90.
• Analyst Rick Schafer forecasts 135% data center revenue growth next year.
• AMD’s third-quarter revenue hit $13.38 billion, up 45% from a year ago.
• Nvidia’s board is investigating whether CEO Jensen Huang was targeted by foreign intelligence.

AMD stock was trading at $455.49 in premarket action Monday, up 1.4%. Nvidia (NVDA) moved the other way, falling 5.2% to $176.90.

Advanced Micro Devices, Inc., AMD

The split follows a Sunday note from Oppenheimer. Analyst Rick Schafer upgraded AMD to Outperform from Perform and set a $600 price target, which implies upside of 34%.

AMD closed Friday at $449.04, up 11% after its third-quarter report. Even so, the stock was down 24% over the past month through Friday’s close.

Nvidia fell 17% over the same stretch. Wall Street has been worried about a possible slowdown in AI spending.

What Oppenheimer Is Counting On

Schafer sees data centers as AMD’s main growth driver. He forecasts that business will grow 135% next year.

By his math, data centers would make up 85% of total sales. He models roughly 3 gigawatts in 2027 and 4 gigawatts in 2028.

He expects OpenAI and Meta Platforms to lead demand through the first quarter. Anthropic is expected to ramp up late in that quarter.

Cloud spending is part of the case too. The top five providers are expected to spend about $1.3 trillion on capital expenditures in 2027, up from $800 billion this year.

On the product side, AMD has committed to a one-year chip cadence. The MI500 is slated for 2027 and the MI600 for 2028.

Oppenheimer raised its estimates after talks with CFO Jean Hu and investor relations VP Matt Ramsay. EPYC CPU and early MI455/Helios shipments drove roughly double data center growth in the third quarter.

Earnings and Street Targets

AMD reported third-quarter revenue of $13.38 billion, up 45% from a year earlier. That beat the top of its guidance range by $279 million.

Data center sales rose 97% from a year ago and 27% from the prior quarter. CEO Lisa Su said she expects sales to grow 80% or more next year.

Other firms have weighed in. DA Davidson kept a Buy rating with a $600 target, StoneX kept a Buy with a $685 target, and TD Cowen kept a Buy with a $675 target.

HSBC rates the stock Hold with a $540 target. RBC Capital rates it Sector Perform, also with a $540 target.

Schafer did not address Nvidia’s troubles in his note. Nvidia’s board said Sunday it will independently investigate whether Huang was targeted by a foreign intelligence effort.

The probe follows a romantic relationship between Huang and an executive suspected of working for Chinese intelligence.

Huang apologized in a letter to staff for being unfaithful to his wife, adding, “I support the investigation and will cooperate fully.”

A later premarket quote showed AMD at $468.01, up 4%. That is higher than the $455.49 quoted earlier.

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