BofA Strengthens AI Bull Case for AMD Stock

Bassyonni

ago 6 hours

Advanced Micro Devices (NASDAQ: AMD) is gaining momentum in the artificial intelligence (AI) sector. Recent developments, particularly highlighted at the OCP Conference in San Jose, California, have bolstered AMD’s standing in the market.

BofA Strengthens AI Bull Case for AMD Stock

BofA analyst Vivek Arya, who ranks in the top 3% of stock experts, reflects on AMD’s promising future. Significant announcements during the OCP Conference have paved the way for optimism about AMD’s position in AI.

Key Developments at the OCP Conference

Oracle plans to launch MI450 Series-based clusters featuring 50,000 GPUs by Q3.
The Helios rack, designed according to Meta’s Open Rack Wide (ORW) standard, was formally unveiled.
AMD’s offerings include MI450 Series GPUs, Venice CPUs, and Vulcano DPUs, with potential sales reaching $15–20 billion per gigawatt.

These products align AMD closely with Meta’s data center architecture, providing an opportunity for expanded presence within the tech giant.

Expanding Role in AI Ecosystems

AMD is now part of major open-standard AI networking ecosystems, including:

UALink for scale-up links and switches.
Ultra Ethernet for scale-out switches.
ESUN for L2/L3 scale-up fabrics and switches.

This positioning supports a broad, vendor-agnostic ecosystem across CPUs and accelerators.

Positive Trends in Software Development

The ROCm software stack continues to improve. The AMD ROCm PyTorch team is actively addressing limitations in ROCm-based testing. Notably, the Helios rack is now operational and available for viewing, marking a shift from previous showcases that relied solely on component images.

Future Projections and Price Target Increase

Arya forecasts significant advancements for AMD, predicting that the first 1 GW deployment by OpenAI will begin in Q4 2026. This project could represent about $17.5 billion in AMD GPU content per gigawatt, with conservative estimates suggesting only 50% materialization.

This projection has led to an increase in Arya’s sales forecasts for AMD, with figures rising by $1.4 billion and $9.7 billion for CY26 and CY27. These reflect growth rates of +4% and +21%, respectively.

Market Share and EPS Estimates

Arya anticipates that with full deployment over four years, AMD’s earnings per share (EPS) could reach:

$10–11 for CY27.
$15–16 or higher by CY30.

Assuming a conservative adoption by OpenAI, Arya estimates AMD’s market share of the AI accelerator market could increase to 4% and 5.4% in CY26 and CY27, respectively. This positions AMD strongly within an estimated market worth $287 billion and $430 billion.

Analyst Consensus and Stock Outlook

Following these advancements, Arya has raised his price target for AMD from $250 to $300, which suggests a potential stock gain of 29%. His rating remains a Buy.

Overall, 28 analysts share a positive view of AMD’s future, with a consensus rating of Moderate Buy and an average target of $249.92, indicating potential 12-month returns of around 7%.

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