AMD Price Target Raised to $700 by UBS on Stronger AI GPU Outlook

UBS has raised its 12-month price target on Advanced Micro Devices (NASDAQ:AMD) to $700 from a previous $670, signaling increased optimism about the chipmaker's prospects in the artificial intelligence market. The brokerage maintained its "Buy" rating on the stock ahead of AMD's upcoming "Advancing AI" event.

Bullish Outlook on AI Revenue

The upgrade is rooted in what UBS describes as growing confidence in AMD's AI product roadmap, an expanding customer base, and significant long-term revenue potential from its graphics processing units (GPUs). In a note to clients, the firm stated that recent supply chain checks indicate substantially higher demand for AI accelerators through 2027.

UBS analysts project that AMD could generate $40 billion to $50 billion in GPU revenue in 2027. This forecast is contingent on the company securing three major hyperscale AI customers with deployments each exceeding one gigawatt. The brokerage identified Amazon as a likely major customer for AMD's upcoming MI450X platform and noted that AI firm Anthropic could also become a key client.

Event Expectations and Roadmap

Analysts expect next week's event will focus primarily on AMD's technology roadmap rather than providing major financial updates. Key announcements are anticipated to include:

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• New details on the MI450X accelerator, which is scheduled to launch later this year.
• Information on the next-generation MI500 GPU family, expected in 2027.
• Progress updates on the Venice and Verano server CPU platforms.

While UBS believes AMD may provide updates on its embedded and gaming divisions or announce deeper partnerships in custom AI chips, it cautioned investors not to expect firm customer announcements at the event itself.

Revised Financial Forecasts

Underpinning the higher price target, UBS has lifted its financial forecasts for AMD based on stronger anticipated demand for AI infrastructure. The firm's revised estimates include:

• 2027 Revenue: Increased to $83.4 billion from a prior $79.2 billion.
• 2027 EPS: Raised to $14.63 from $13.47.
• 2028 EPS: Lifted to $21.11 from $18.85.