Advanced Micro Devices, Inc. (AMD) had a stellar quarter with revenue beating Wall Street estimates. The company’s revenue came in at $11.54 billion, higher than Wall Street estimations of $11.31 billion, and an increase of 50% year-on-year. AMD’s rising revenue is expected to continue over the coming years. Baird analysts raised their stock price target from $625 to $1,250 amid the ongoing craze around AI-based stocks. Let’s discuss when, if at all, AMD can deliver on the stock price prediction.
When Can AMD Stock Price Deliver On Baird’s $1250 Prediction?
AMD’s upswing follows a market-wide trend. The surge in AI demand and the increased spending on data centers has led to a surge in the earnings of chip manufacturers. Wall Street analysts are also becoming increasingly bullish on AI chip makers, with AMD and Nvidia taking top precedence. Baird’s $1250 prediction for AMD is the highest among Wall Street. Other firms are still quite conservative, with predictions ranging from roughly $550 to around $725.
It is unclear when, if at all, AMD’s stock price can hit $1250. AMD is expected to greatly benefit from the AI boom, especially with the coming of CPU-focussed agentic AI. The current trend of generative AI depends more on GPU power. Agentic AI will change the tide towards CPUs. AMD could see a massive upswing in its sales, and thereby its stock price. We could also see Helios sales reflect in the fourth quarter of this year. Stock prices could surge once the Helios numbers come in.
Also Read: If You Invested $1,000 in AMD Stock in 2020, Here’s Its Value Now
While AMD’s stock price is expected to continue rising, there are some risks you should be aware of. Investors are becoming increasingly suspicious about the sustainability of increased AI spending. The sentiment was also reflected in AMD’s stock price movements after its recent quarterly earnings report. AMD stock dipped more than 8% despite stellar revenue and earnings. This was likely due to investors questioning the validity of AI infrastructure spending.
