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Citi raises AMD price target ahead of AI event

On Monday, Citi analysts raised their price target for Advanced Micro Devices (NASDAQ:AMD) to $120.00, an increase from the previous target of $100.00. The firm maintained its Neutral rating on the company’s shares. Currently trading at $116.19 with a market capitalization of $188.39 billion, AMD shows strong momentum with notable returns over recent months, according to InvestingPro data. The stock is currently trading near its Fair Value.

The adjustment comes ahead of AMD’s "Advancing AI" day, which is scheduled for June 12th. Citi analysts expect AMD to launch its latest AI product, MI355X, and discuss its upcoming MI400 product at the event. The firm also anticipates that AMD could highlight new customers, potentially including AWS or OpenAI. With impressive revenue growth of 21.71% and a P/E ratio of 85.14, AMD continues to demonstrate strong market positioning. InvestingPro subscribers have access to 15+ additional exclusive insights about AMD’s financial health and growth prospects.

In their commentary, Citi analysts noted a factor influencing their model. "We are adjusting our model for a one-time charge of $800.0 million due to China export controls and reiterate our Neutral rating," the firm stated. Despite this adjustment, AMD maintains strong fundamentals with a healthy current ratio of 2.8 and operates with moderate debt levels.

In other recent news, AMD announced the sale of ZT Systems’ manufacturing operations to Sanmina for approximately $3.0 billion, comprising $2.4 billion in cash, $150 million in stock, and a $450 million contingent payment. This transaction is part of AMD’s strategy to focus on AI infrastructure, retaining the 1,200-strong engineering team from ZT Systems to enhance its competitive edge in this sector. The sale aligns with AMD’s broader goals, including a strategic partnership with Sanmina to introduce new products related to AMD’s cloud rack and cluster-scale AI solutions. Analysts have responded to these developments with varied perspectives. Wells Fargo (NYSE:WFC) maintains an Overweight rating with a $120 price target, while Citi holds a Neutral stance with a $100 target, reflecting differing views on AMD’s valuation and strategy. Stifel, on the other hand, reiterated a Buy rating with a $132 target, emphasizing AMD’s potential in the AI infrastructure market. Mizuho (NYSE:MFG) also raised its price target to $135, citing AMD’s AI growth prospects and strategic partnerships as key factors. These recent moves and analyst ratings underscore AMD’s focus on innovation and strategic positioning in the evolving tech landscape.

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