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Investing.com - Goldman Sachs maintained its Neutral rating and $210.00 price target on AMD (NASDAQ:AMD) following the company’s 2025 Financial Analyst Day in New York. AMD currently trades at $237.52, significantly above Goldman’s target and according to InvestingPro analysis, the stock appears to be overvalued relative to its Fair Value assessment.
The investment bank expects AMD shares to trade higher in the near term, citing the company’s presentation of long-term financial targets that exceeded Wall Street expectations. These targets are primarily driven by anticipated strong growth in the datacenter segment across both AI GPUs and CPUs. InvestingPro data shows AMD’s revenue grew 31.83% over the last twelve months, with analysts forecasting 32% growth for fiscal year 2025, supporting the company’s ambitious outlook.
Goldman Sachs acknowledges that AMD’s financial targets appear achievable but notes they depend on significant gross margin and operating expense leverage, along with much greater scale. The firm highlighted that these projections rely heavily on the strong ramp of a few key customers, particularly OpenAI. AMD currently trades at a P/E ratio of 127.75, which InvestingPro identifies as exceptionally high relative to near-term earnings growth, reflecting the premium investors are willing to pay for the company’s AI potential.
The bank’s analysis indicates AMD has made substantial progress on its datacenter GPU roadmap and continues to build momentum in its core CPU business. Despite these positive developments, Goldman maintains its neutral stance due to the model’s dependence on the OpenAI partnership.
Goldman Sachs stated it could adopt a more positive view if it gains "incremental confidence" regarding the OpenAI revenue stream and execution timeline in upcoming quarters.
In other recent news, AMD has outlined an ambitious long-term growth strategy, aiming for a revenue compound annual growth rate of over 35% and non-GAAP earnings per share surpassing $20 within the next three to five years. The company expects its data center business to grow at more than 60% annually, driven by its AMD Instinct MI350 Series GPUs. Additionally, AMD plans to launch Helios systems with Instinct MI450 Series GPUs in 2026, followed by the MI500 Series in 2027. Analysts have responded positively, with TD Cowen raising its price target on AMD to $290 and maintaining a Buy rating, highlighting progress in the data center GPU segment. Benchmark has also increased its price target to $325, citing AMD’s expanding footprint in the AI data center market. Meanwhile, Deutsche Bank reiterated its Hold rating on AMD, maintaining a price target of $250. These developments come as AMD continues to secure significant deals, including partnerships with companies like OpenAI, to power AI models.
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