SANTA CLARA, California, August 25, 2026, 12:45 EDT — Trading was brisk in U.S. regular hours.
- Shares of Advanced Micro Devices gained 4.3% following an upgrade to Strong Buy from Raymond James.
- Analyst Simon Leopold lifted his price target to $641 from $565, indicating roughly 35% potential upside.
- Raymond James forecasts that the server-CPU market will expand at a 44% annual rate, climbing to $201 billion by 2030.
- AMD saw its Data Center revenue surge to $6.7 billion last quarter, doubling from earlier, while the stock continues to trade at close to 41 times forward earnings.
Shares of Advanced Micro Devices NASDAQ:AMD rose 4.3% to $476.50 on Tuesday, after a Raymond James upgrade, drawing increased market attention to CPUs as well as AI accelerators. By 12:40 EDT, trading volume totaled 11.3 million shares.
The surge increased AMD’s market capitalization by about $32 billion. This one-day rise matches nearly five quarters’ worth of the company’s most recent Data Center revenue, highlighting how much anticipated CPU demand is being factored into its valuation.
Raymond James analyst Simon Leopold upgraded AMD to Strong Buy, up from Outperform, and increased his price target to $641 from $565. Leopold forecasts the server-CPU sector to grow at a 44% compound annual rate through 2030, approaching $201 billion in value.
The core argument is that agentic AI drives up CPU workloads adjacent to each accelerator. CPUs handle context management, retrieval, database operations, tooling, and app logic. According to AMD, its latest EPYC line-up delivers up to 256 cores and 512 threads per socket.
| AMD operating measure | Q2 2026 | Year-on-year change |
|---|---|---|
| Total revenue | $11.54 billion | up 50% |
| Data Center revenue | $6.72 billion | up 107% |
| Data Center share of sales | 58% | Increased |
| Non-GAAP gross margin | 56% | rise of 13 percentage points |
| Q3 revenue outlook midpoint | $13.0 billion | approximately up 41% |
Leopold’s position received a boost from AMD’s recent earnings. Data Center revenue rose 107% to $6.72 billion and accounted for 58% of the quarter’s total revenue. Chief Executive Lisa Su stated “EPYC demand accelerates” as AMD moved into the latter half. AMD second-quarter results
The valuation challenge is significant. With shares at $476.50, AMD is valued around $779 billion and trades at nearly 41 times projected earnings. Leopold’s price target of $641 suggests a market capitalization of about $1.04 trillion based on the current number of shares.
Reaching that target calls for an extra $266 billion in equity value. That rise is over fivefold the analysts’ consensus average for 2026 revenue of $50.8 billion. As a result, much of the lift will need to come from higher earnings.
| Analyst or consensus | Rating | Price target | Date |
|---|---|---|---|
| Raymond James | Strong Buy | $641, previously $565 | Aug. 25 |
| BMO Capital | Buy | $550 | Aug. 20 |
| Roth MKM | Buy | $650 | Aug. 20 |
| Bernstein | Buy | $650 | Aug. 13 |
| 54-analyst consensus | Strong Buy | $612.29 average | Aug. 25 snapshot |
The analyst consensus stays bullish, though not unanimous. According to StockAnalysis, there are 39 Strong Buy ratings, five Buy ratings, and 10 Hold recommendations for August. The mean price target indicates a 28.5% potential rise from Tuesday’s midday level.
Other chip stocks also advanced as the sector rebounded. Nvidia NASDAQ:NVDA climbed around 1.3%, while Intel NASDAQ:INTC rose approximately 1.5%. AMD’s greater gain followed an upgrade specific to the company.
Risks: Lower momentum in agentic-AI could dampen the CPU outlook. Nvidia’s performance, regulatory export limits, pricing competition, and its rich valuation all pose threats to Tuesday’s advance. AMD faces the challenge of turning market expansion into higher sales and profitability while avoiding overspending.
The immediate challenge is delivery. AMD forecast around $13 billion in revenue for the third quarter and expects a 56% non-GAAP gross margin. Maintaining these figures would strengthen the financial foundation for the server-CPU outlook.
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