Trump-Zelensky meeting ahead, Fed rate outlook in focus - what’s moving markets
Investing.com -- HSBC upgraded Advanced Micro Devices (NASDAQ:AMD) to Buy and doubled its price target to $200 given a stronger-than-expected pricing power in its AI GPU lineup and growing confidence in the company’s data center roadmap.
The brokerage, which had previously downgraded AMD in January, now expects the company’s MI350 chips to command significantly higher prices than initially assumed, with performance on par with Nvidia’s Blackwell-based B200.
HSBC raised its 2026 AI revenue forecast to $15.1 billion, 57% above consensus, driven by average selling prices it now sees at $25,000 per unit versus a prior estimate of $15,000.
Analysts said the MI350’s earlier-than-expected pricing strength and wider adoption of CoWoS packaging could further lift earnings, while a shift in mix toward high-end AI GPUs in 2025 should support near-term momentum.
The firm lifted its 2025 and 2026 earnings estimates by 13% and 23%, respectively.
A potential catalyst beyond 2025 is the launch of the MI400 series, AMD’s first full-rack AI server solution, expected to compete with Nvidia’s next-generation Vera Rubin platform in 2026.
HSBC said the MI400’s use of standard data center infrastructure could help adoption but noted it is still early to quantify the upside.
Non-AI businesses, including general server and client segments, are holding up well, with HSBC revising up 2025 server shipment estimates by 5%.
Despite a recent rally following AMD’s AI event in June, the firm believes the full impact of its AI pricing power is not yet reflected in the stock.
HSBC’s $200 target is based on a 31x multiple of 2026 estimated EPS.