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Investing.com - Deutsche Bank (ETR:DBKGn) raised its price target on AMD (NASDAQ:AMD) to $150.00 from $130.00 on Wednesday, while maintaining a Hold rating on the semiconductor company following its second-quarter earnings report. The stock, currently trading at $174.31, sits near its 52-week high of $182.50, having delivered an impressive 58% return over the past six months. According to InvestingPro analysis, AMD appears overvalued at current levels.
The company delivered a solid revenue beat in its Q2 2025 report, posting $7.7 billion in revenue, which was 4% above Deutsche Bank’s estimate. AMD also provided an optimistic third-quarter guidance of $8.7 billion, exceeding the bank’s forecast by 2%. This continues AMD’s strong growth trajectory, with InvestingPro data showing 21.7% revenue growth over the last twelve months. The company maintains a GOOD financial health score, with liquid assets exceeding short-term obligations.
Deutsche Bank noted that while overall revenues surpassed expectations, the growth drivers were mixed, with lower-quality semi-custom Gaming revenue driving the second-quarter upside, while higher-quality Data Center GPUs (Instinct) are expected to fuel third-quarter growth.
The bank highlighted that AMD appears to be ramping its MI355 product slightly ahead of schedule, projecting a 75% quarter-over-quarter increase in Instinct business for Q3, despite no China-focused MI308 shipments being included in the forecast. Deutsche Bank expects this Instinct momentum to continue through the second half of 2025 and into 2026.
Despite impressive gross margin stability and solid growth prospects, Deutsche Bank maintained its Hold rating, noting that AMD’s growth drivers are largely reflected in the current valuation of approximately 25-30 times price-to-earnings ratio, with earnings per share power in the $6-7 range. InvestingPro analysis reveals an even higher current P/E ratio of 127x, with 20 additional key insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, Advanced Micro Devices Inc. (AMD) reported its second-quarter earnings for 2025, showcasing a substantial 32% increase in revenue, amounting to $7.7 billion. This growth was largely attributed to strong sales of AMD’s EPYC and Ryzen processors. The company met earnings per share expectations, reporting an EPS of $0.48. Following these results, Raymond (NSE:RYMD) James raised AMD’s stock price target from $120 to $200, maintaining an Outperform rating. This decision was influenced by AMD’s Q2 results and a third-quarter revenue outlook that surpassed consensus expectations, particularly in the Client and Gaming segments. The Data Center segment’s performance aligned with expectations. Despite the positive earnings report, the stock saw a slight 1.4% dip in the aftermarket session. These developments come amid broader tech market trends affecting investor sentiment.
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