Shares of Advanced Micro Devices Inc. (NASDAQ:AMD) are trading higher Thursday afternoon after HSBC upgraded the stock from Hold to Buy and set a $200 price target.
What To Know: The firm cited significantly higher expectations for AMD's artificial intelligence revenue in fiscal 2026, projecting $15.1 billion compared to the current consensus of $9.6 billion, a 57% upside, according to Investing.com.
The analyst at HSBC pointed to strong pricing traction for AMD's new MI350 AI chip series as the main driver behind the revised outlook. The upgrade marks a major reversal from HSBC's prior rating in January, when it downgraded AMD to Reduce on concerns over its competitive positioning and AI roadmap. Now, the firm sees those risks easing, with confidence in AMD's AI pipeline, including the MI400 rack architecture expected in 2026.
Despite AMD shares already climbing 14% after the company's AI Day on June 12, HSBC said the market still hasn't fully priced in the potential re-rating from long-term AI growth. The stock currently trades at a P/E of 101 on a trailing basis and 37 on a forward basis, reflecting high growth expectations. The company’s market cap now stands at $234 billion, according to Benzinga Pro.
AMD is also in the spotlight ahead of its second-quarter earnings release, set for Aug. 5. KeyBanc recently projected that AMD could post $7–8 billion in AI revenue this year, led by strong demand for the MI355 series. Goldman Sachs on Thursday initiated coverage with a Neutral rating, noting AMD's success in gaining share in the server and PC CPU markets, but cautioning about competition from ARM-based rivals.
Truist Securities remains more reserved, keeping a Hold rating and flagging uncertainty around whether some customers are buying AMD's GPUs mainly to push back on Nvidia's pricing power. Even so, datacenter demand for AMD remains healthy, with continued growth in its server deployments.
With analyst sentiment shifting and AI growth expectations rising, AMD's stock is gaining momentum as investors reassess its role in the high-stakes battle for AI infrastructure leadership.
AMD Price Action: AMD shares were up 3.66% at $143.47 at the time of publication, according to Benzinga Pro.
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