AMD stock rating reiterated at Buy by Jefferies, citing AI growth

Investing.com - Jefferies has reiterated its Buy rating and $300.00 price target on AMD (NASDAQ:AMD) following the company’s 2025 Analyst Day. This target represents potential upside from the current price of $237.52, though it falls below the analyst high target of $380. According to InvestingPro data, AMD has delivered strong returns with a 119.68% price gain over the past six months.

The firm highlighted AMD’s positive outlook across all business segments, particularly noting the company’s projection of the AI silicon total addressable market reaching $1 trillion or more by 2030. As a prominent player in the Semiconductors & Semiconductor Equipment industry with a market cap of $386.69 billion, AMD is well-positioned to capitalize on this growth.

Jefferies was impressed by AMD’s financial model, which forecasts revenue growth exceeding 35% and gross margins of 55-58%, potentially yielding more than $20 in earnings per share before 2030. This ambitious target significantly exceeds AMD’s current EPS forecast of $3.98 for fiscal year 2025 and its trailing twelve months diluted EPS of $1.91.

The semiconductor company expects an 80%+ growth rate in AI-related revenue, while general-purpose servers should grow by more than 20% as the total addressable market accelerates to $60 billion by 2030, with AMD targeting over 50% market share. AMD has already demonstrated strong growth momentum, with revenue increasing 31.83% in the last twelve months to $32.03 billion.

Jefferies indicated that while the $20+ EPS target is impressive, AMD could potentially achieve closer to $30 EPS if it executes successfully, though this remains largely dependent on market reception to the company’s MI400 and MI500 Series GPUs. Currently trading at a P/E ratio of 127.75, AMD is valued at a premium compared to its near-term earnings growth. For deeper insights into AMD’s valuation and 20+ additional ProTips, visit InvestingPro, which offers comprehensive Pro Research Reports on 1,400+ top US stocks including AMD.

In other recent news, AMD presented its long-term growth strategy at its Financial Analyst Day, aiming for a revenue compound annual growth rate of over 35% and non-GAAP earnings per share exceeding $20 in the next three to five years. The company expects its data center business to grow at more than 60% CAGR, driven by the AMD Instinct MI350 Series GPUs. AMD plans to introduce Helios systems with Instinct MI450 Series GPUs in the third quarter of 2026, followed by the MI500 Series in 2027. Jefferies reiterated a Buy rating for AMD with a price target of $300, noting a positive outlook across all business segments and an expanded AI silicon market projection to over $1 trillion by 2030.

Goldman Sachs maintained a Neutral rating with a $210 price target, acknowledging AMD’s long-term financial targets, which exceeded Street expectations, particularly in the Datacenter segment. Deutsche Bank also reiterated a Hold rating with a $250 price target, describing the analyst meeting as "very constructive and AI/DC-driven," with AMD significantly raising all key financial target metrics compared to 2022. These developments highlight AMD’s strategic focus on expanding its data center and AI leadership.

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