AMD stock price target raised to $270 from $190 at Wedbush on AI deals

Investing.com - Wedbush has raised its price target on Advanced Micro Devices (NASDAQ:AMD) to $270 from $190 while maintaining an Outperform rating, citing significant new AI partnerships that promise substantial future revenue growth. AMD, currently trading at $218.09, has shown remarkable momentum with a 129% surge over the past six months. According to InvestingPro data, the company maintains strong financial health with a current ratio of 2.49, indicating solid liquidity.

The research firm highlighted two major agreements that solidified AMD’s position in the AI market. AMD and Oracle recently announced that Oracle Cloud Infrastructure will begin deploying 50,000 AMD MI450 GPUs in the third quarter of 2026, with further scaling expected in 2027 and beyond. With a market capitalization of $354 billion and revenue growth of 27% in the last twelve months, AMD has established itself as a prominent player in the semiconductor industry.

This announcement followed AMD’s partnership with OpenAI, which is expected to deploy 6 gigawatts of AI capacity using AMD solutions. Wedbush estimates each gigawatt of capacity likely requires approximately $20 billion of AMD products, potentially generating revenue that "promises to dwarf" their previous estimates.

Based on these developments, Wedbush has significantly increased its forward estimates for AMD. While near-term adjustments for Q3 and Q4 2025 are marginal, the firm now projects AMD’s AI-related revenues to reach approximately $20 billion in 2027, driven by delivering "a significant portion of a GW of capacity to OpenAI."

The new $270 price target is based on applying a price-to-earnings multiple of approximately 30 times Wedbush’s fiscal year 2027 earnings per share estimate of $9, plus net cash. The firm considers this multiple appropriate given AMD’s "likely revenue path over the next few years." Currently, AMD trades at a P/E ratio of 133, reflecting high growth expectations. Want deeper insights? InvestingPro offers exclusive access to 17+ additional ProTips and comprehensive financial analysis for AMD, helping investors make more informed decisions.

In other recent news, Advanced Micro Devices, Inc. (AMD) has made several significant announcements. The company unveiled its Helios open rack-scale AI platform at the Open Compute Project Global Summit, designed to support next-generation AI workloads with its Instinct GPUs, EPYC CPUs, and Pensando networking technologies. Additionally, AMD and Oracle announced plans to deploy an AI supercluster powered by 50,000 AMD Instinct MI450 Series GPUs in 2026, further expanding their partnership. This supercluster will utilize AMD’s Helios rack design, incorporating next-generation EPYC processors and Pensando networking technology.

In analyst updates, Mizuho raised its price target for AMD to $275 from $205, maintaining an Outperform rating, following AMD’s deal with OpenAI. Moody’s Ratings upgraded AMD’s and Xilinx’s senior unsecured ratings to A1, citing strong multi-year revenue and earnings growth prospects due to increased data center GPU demand from the OpenAI partnership. Separately, Wolfe Research upgraded Monolithic Power Systems’ stock rating to Outperform, setting a price target of $1,200, based on a conservative path to earnings growth. These developments highlight the ongoing strategic and financial advancements within AMD and its industry partners.

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