Goldman and BofA Lift AMD Targets as Agentic AI and Server-CPU Momentum Converge with Record Earnings

AMD has drawn back-to-back analyst upgrades in a week that underscores a fundamental shift in how Wall Street views the chipmaker’s role in the artificial intelligence boom. Goldman Sachs raised its rating to Buy on May 6, setting a $450 price target — nearly doubling its previous $240 forecast — while Bank of America’s Vivek Arya followed with a $500 target, citing AI-infrastructure spending that could reach $1.7 trillion by 2030. The upgrades land as CEO Lisa Su sets aggressive long-term goals: annual revenue growth north of 35%, an operating margin above 35%, and earnings per share exceeding $20.

Goldman’s upgrade pivots on the concept of “agentic AI” — systems that do more than generate text or images by autonomously coding, navigating the web, and orchestrating complex workflows. Such workloads demand a balanced mix of server CPUs, networking components, and graphics processors, which plays directly into AMD’s strength as a full-platform provider. The x86 server architecture, where AMD already claims over 40% market share, becomes a critical beneficiary as enterprise AI deployments grow more sophisticated. Goldman forecasts AMD’s datacenter GPU business will expand 66% in 2026 and nearly double again the following year.

The thesis is supported by a deepening relationship with Meta, which plans to deploy 6 gigawatts of AMD Instinct GPUs — the first phase built around custom MI450 accelerators. Meta also emerges as a lead customer for the next-generation EPYC “Venice” server chip, part of the sixth-generation portfolio. AMD is increasingly selling integrated platforms of CPUs, GPUs, and networking gear, positioning itself closer to the hyperscaler budgets that have long been dominated by Nvidia.

Should investors sell immediately? Or is it worth buying AMD?

Recent quarterly results give the bull case a solid foundation. Revenue for the March quarter jumped 38% to $10.3 billion, with the datacenter segment churning out $5.8 billion alone. Adjusted earnings per share of $1.37 beat the analyst consensus of $1.29, and management guided for roughly $11.2 billion in current-quarter revenue. The stock reacted modestly — trading at €380.50 with a slight 0.37% decline on the day — but has still surged more than 81% over the past 30 days and 261% over the year, hovering near its all-time high of €380.65.

That rally has distorted traditional valuation metrics. AMD’s price-to-earnings ratio sits at about 150, raising eyebrows even among optimists. The management team appears to share some of that caution: CEO Lisa Su sold a large block of shares in March, and Vice President Grasby unloaded holdings in May. A shareholder meeting on Wednesday approved a compensation plan that reserves an additional 65 million shares for executives, adding dilution concerns to the mix.

Analyst Vivek Arya at Bank of America sees the high valuation as justified by the addressable market, noting that a technical shift in server architecture — from GPU-heavy designs toward a more balanced CPU-GPU split — works in AMD’s favor. Daiwa Securities, meanwhile, warned on May 13 that after a 150% run in two months, a short-term consolidation phase looks likely. Still, the longer-term debate centers on whether earnings can keep pace with expectations. Goldman’s 2027 and 2028 earnings estimates stand roughly 20% above the consensus, and any downward revision in datacenter growth could quickly deflate the stock.

Investors have two key catalysts on the calendar: Computex in June, where AMD is expected to unveil product details, followed by an official analyst day in July. The market will be listening for concrete news on potential deals with Meta, OpenAI, or other hyperscalers. For now, AMD is walking a tightrope between unprecedented growth projections and an already stretched share price — a balancing act that will define the next chapter of its AI story.

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