AMD stock soars 10% as analysts boost price targets after AI chip showcase event

AMD shares jumped nearly 10% on Monday after the company showcased new artificial intelligence products at its recent event, according to Yahoo Finance reporting on the market reaction. The chip maker introduced its new Instinct MI350 accelerators and upcoming Helios racks during last week's presentation, which caught the attention of Wall Street analysts. Piper Sandler analyst Harsh Kumar raised his price target for AMD stock from $125 to $140 after reviewing the company's latest announcements.

The analyst noted positive signs in AMD's client business, which used to be the company's largest division but now ranks second behind data centers. Kumar sees potential improvement coming from several factors, including aging computers from the pandemic era, new AI-powered PC features, and companies buying ahead of possible tariffs. The Windows 10 operating system will also stop receiving support soon, which could push people to buy new computers. Kumar expects AMD's data center and graphics card revenue to bounce back in the second half of the year, thanks to the new MI350 chips arriving in late 2025. Yahoo Finance notes that investors had worried about declining revenue in this important business area last quarter.

AMD's leader, Lisa Su, made bold claims about the company's future during the artificial intelligence conference, as reported by The Street, which covered her keynote presentation. Su told attendees that computing has become more important than ever and that billions of people use AMD technology daily through services like Microsoft Office, Facebook, Zoom, and Netflix. She announced that AMD's new MI350 chip series performs better than competing products from market leader Nvidia while costing significantly less money.

The MI355 chips began shipping earlier this month and run 35 times faster than older versions, Su explained to the audience. AMD currently holds a much smaller market share compared to Nvidia in AI accelerator chips, but the company aims to close this gap with its new offerings. Su previously predicted the AI chip market would reach $500 billion by 2028, but now believes it will exceed that amount even sooner. The Street reports that AMD faces restrictions on shipping its most powerful components to China due to trade rules, and the company is working with the Trump administration to sell AI products to other countries. AMD stock has dropped 4% this year and fallen 28% compared to twelve months ago.

Multiple investment firms issued positive research reports following AMD's technology showcase, with Investopedia documenting the analyst reactions to the event. Piper Sandler analysts expressed enthusiasm about AMD's new Helios server rack design, calling it crucial for the growth of AMD's Instinct graphics processing units. The Helios system will combine next-generation MI400 chips into larger computing systems expected to launch in 2026. AMD highlighted partnerships with major technology companies, including ChatGPT creator OpenAI, Meta Platforms, Oracle, and Microsoft, during the presentation.

Bank of America analysts believe Amazon Web Services will announce a partnership with AMD soon, since AWS was a key sponsor of the event; however, AWS typically makes such announcements at its own conferences rather than partner events. Bank of America maintained its buy rating and $130 price target for AMD stock after the event. Investopedia notes that the average analyst price target from Visible Alpha stands at approximately $124, while AMD shares traded around $127 following the 10% gain. Evercore ISI analyst Mark Lipacis also raised his price target to $144 from $126, saying AMD is making progress with its software and gaining traction with major cloud service providers.