Stifel maintains AMD stock Buy rating with $132 target

On Wednesday, Stifel analysts maintained a positive outlook on AMD (NASDAQ:AMD) shares, reaffirming a Buy rating and a price target of $132.00. Currently trading at $98.62, AMD shows mixed signals according to InvestingPro analysis, with analyst targets ranging from $75 to $200. AMD’s performance in the March quarter reported revenues of $7.4 billion and an adjusted EPS (Earnings Per Share) of $0.96, surpassing consensus estimates. The company’s adjusted gross margin (GM) stood at 54%, aligning with market expectations and reflecting its strong market position with a $159.4B market capitalization.

AMD’s management has provided guidance for the second quarter of fiscal year 2025, projecting revenues to reach a midpoint of $7.4 billion. This forecast includes a significant $700 million impact from China-based MI308 revenues, which is anticipated to contribute to a $1.5 billion headwind over the full year, primarily affecting the second and third quarters. Despite these challenges, InvestingPro data shows AMD maintaining strong revenue growth of 13.69% over the last twelve months, with analysts forecasting 22% growth for FY2025.

In addition to financial guidance, AMD shared insights into its Instinct product roadmap, projecting a ramp-up of the MI400 series in fiscal year 2026. The recent acquisition of ZT Systems was highlighted as an enhancement to AMD’s capabilities, offering rack-scale solutions. More details on the company’s strategy for AI compute, software, and system-level advancements are expected to be unveiled at the Advancing AI event scheduled for June.

Despite the current uncertain macroeconomic climate, Stifel’s analysts expressed confidence in AMD’s trajectory. They underscored the company’s continued progress in high-growth areas and its potential to further penetrate the market. The analysts anticipate that AMD will continue to gain market share and solidify its presence within the burgeoning AI ecosystem. With a "GOOD" Financial Health Score from InvestingPro, which offers 14 additional exclusive insights about AMD’s potential in the AI market, investors can access comprehensive analysis through the Pro Research Report, available with an InvestingPro subscription.

In other recent news, Advanced Micro Devices, Inc. (AMD) reported strong financial results for the first quarter of 2025, exceeding Wall Street expectations. The company achieved earnings per share (EPS) of $0.96, slightly above the forecast of $0.95, and revenue reached $7.4 billion, surpassing the expected $7.11 billion. Despite the positive earnings, Jefferies adjusted its price target for AMD from $120 to $100 while maintaining a Hold rating, citing concerns about AMD’s growth prospects in the AI sector. Meanwhile, KeyBanc Capital Markets maintained a Sector Weight rating on AMD, noting strong first-quarter results and guidance that exceeded market expectations, despite potential revenue impacts from export controls in China.

Evercore ISI expressed confidence in AMD by maintaining an Outperform rating with a $126 target, highlighting the anticipated growth of AMD’s Data Center GPU business. The firm anticipates that the launch of AMD’s third-generation solution, the MI350, will drive significant growth. However, Bernstein analysts maintained a Market Perform rating with a $95 price target, pointing out mixed sentiments regarding AMD’s financial performance and market dynamics. They noted that while AMD demonstrated robust client and gaming revenue, concerns remain about potential revenue pull-forward and escalating tariff issues.

AMD’s management has projected strong double-digit revenue growth for 2025, despite challenges such as export controls in China. The company anticipates a mid-year ramp-up of the MI355 series and expects MI GPUs to resume year-over-year growth in the third quarter. AMD continues to focus on expanding its AI infrastructure and product offerings to sustain momentum, positioning itself to capitalize on the increasing demand for advanced computing solutions.

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