Goldman Sachs upgraded Advanced Micro Devices (AMD) following a blowout first-quarter earnings report, citing strong structural tailwinds from agentic artificial intelligence. The investment bank raised its price target and upgraded its rating, signaling significant near-term growth potential for the chipmaker.
Key Investment Bank Actions
Goldman Sachs issued a positive note to clients detailing their revised outlook on AMD. Key actions include:
- Rating Upgrade: The stock was upgraded from 'Hold' to 'Buy'.
- Price Target Hike: The price target was raised to $450, up from $240, suggesting a potential upside of 27% from the previous week's closing price.
AI as the Growth Catalyst
Analysts point to the proliferation of agentic AI as the primary driver for AMD's sustained growth in the server CPU market. James Schneider, an analyst at Goldman Sachs, noted that:
- Agentic AI—defined as AI-powered tools capable of autonomous task execution across various applications—is expected to be a medium-term tailwind for server CPUs.
- The increasing demand for AI data centers is driving a shift toward 'inference workloads,' which should boost orders for AMD's CPUs.
- The analyst believes that x86 chips, like those from AMD, are poised to benefit significantly from the rise of enterprise AI agents.
Revenue Projections and Market Sentiment
Goldman Sachs provided specific revenue forecasts, indicating strong confidence in AMD's market position. Furthermore, broader analyst sentiment remains highly positive:
- Server CPU Revenue Forecast: Goldman Sachs projects that AMD will generate $21.1 billion in server CPU revenue by the end of 2027, which is 24% above the general consensus estimate.
- Analyst Consensus: Out of 52 analysts covering the stock, 39 currently maintain a 'Buy' or 'Strong Buy' rating, according to LSEG data.
