Oppenheimer upgrades AMD, sees upside as AI chip outlook improves

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Oppenheimer upgrades AMD AI outlook

Highlights

Oppenheimer upgrades AMD to outperform with a $600 price target, implying 34% upside, citing stronger AI chip demand and data center growth.
Oppenheimer forecasts AMD to achieve 135% data center revenue growth in 2027, fueled by multi-generation customer wins and upcoming Helios and MI500 solutions.
Despite AMD shares falling over 26% in the past month, 48 of 56 analysts now rate AMD a buy or strong buy, and shares rose over 3% premarket after bullish earnings.

Upgrade rationale and growth outlook

As reported by CNBC, citing Oppenheimer, the investment firm upgrades AMD to outperform from perform and sets a $600 price target, implying 34% upside from Friday’s close.

In a note to clients on Sunday, analyst Rick Schafer says the firm is raising estimates after another bullish earnings call and a recent fireside chat. He says AMD is emerging as a durable supplier of AI compute, supported by multi-generation customer wins and Helios rack-scale solutions that back a materially larger data center business.

Schafer adds that annual Instinct product launches and progress in AMD’s open software stack are strengthening the company’s competitive position. He also says compute-heavy agentic AI is driving additional demand for both graphics processing units and central processing units.

Oppenheimer says AMD’s strategic partnership with Anthropic is likely to gather pace in the first quarter of 2027. The firm also expects the planned launch of AMD’s MI500 line of GPUs for high-performance computing and large-scale AI training in the second half of 2027 to support the company’s business and shares.

It also models AMD delivering 135% data center revenue growth in 2027, with gains in server CPU share and content, alongside a smaller contribution from client and gaming operations that supports a more attractive earnings mix.

Market reaction and broader analyst view

AMD shares have fallen more than 26% over the past month as investors rotate out of semiconductor and other AI-linked stocks amid concerns about financing risks across the industry.

Even so, Oppenheimer’s view broadly aligns with Wall Street sentiment. LSEG data shows 48 of the 56 analysts covering AMD rate the stock a buy or strong buy.

Shares rise more than 3% in premarket trading on Monday. The upgrade comes after AMD reports better-than-expected third-quarter earnings and revenue last week.

Our earlier article on mounting financial and logistical pressures in the U.S. AI data center buildout highlighted how higher funding costs, construction delays, and power constraints are starting to slow or reshape expansion plans. It noted that only a portion of announced projects appear realistically fundable and buildable on schedule, raising questions about how quickly AI compute capacity can grow and how investor confidence may be affected.

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