AMD Stock Gets Wall Street Love — But Is It Overvalued?

TLDR

• Benchmark raised its AMD price target to $485 from $325, maintaining a Buy rating after Q1 results beat Wall Street expectations.
• AMD reported Q1 revenue of $10.25 billion and EPS of $1.37, both above analyst estimates.
• Goldman Sachs upgraded AMD to “Buy” and raised its target to $450; Bernstein set a $525 target with an “Outperform” rating.
• AMD’s Q2 revenue guidance of $11.2 billion also exceeded market predictions, driven by AI-related CPU and GPU demand.
• GF Value places AMD at 112.9% overvalued at its current price of $493.16, with insiders selling $122.1 million worth of stock in the past three months.

AMD delivered a strong first quarter, and Wall Street is taking notice.

Advanced Micro Devices, Inc., AMD

Benchmark raised its price target on Advanced Micro Devices (AMD) to $485 from $325 on Tuesday, keeping its Buy rating intact. The firm pointed to AMD’s Q1 results and Q2 guidance, both of which came in ahead of expectations.

AMD reported Q1 revenue of $10.25 billion, topping analyst estimates of $9.89 billion. Earnings per share came in at $1.37, beating the consensus estimate of $1.29.

For Q2, AMD guided for revenue of $11.2 billion, again ahead of what the market had penciled in.

Benchmark highlighted AMD’s commentary around multi-year Instinct GPU deployments and growing EPYC demand tied to inference and agentic AI workloads. The firm also flagged engagements with Meta and OpenAI as offering visibility into 2027 accelerator deployments.

Analyst Upgrades Stack Up

Goldman Sachs upgraded AMD to “Buy” and raised its price target from $240 to $450. Bernstein moved to “Outperform,” lifting its target from $265 to $525.

Rosenblatt also raised its target for AMD, going from $300 to $490, citing strong server CPU demand driven by AI adoption. Northland bumped its target from $260 to $320, pointing to strength in both server CPUs and GPUs.

Seaport Global Securities upgraded AMD to Buy as well, noting gains in TSMC allocation and a positive growth outlook.

The upgrades reflect growing conviction that CPU importance in AI infrastructure is rising, not just GPU. AMD appears to be gaining traction in both areas.

AMD has also doubled its projected server CPU compound annual growth rate and expanded its total addressable market estimate.

Benchmark noted that the market is still in the early stages of pricing in AMD’s broader earnings potential as it gains ground in AI CPU and GPU compute.

Valuation Questions Remain

Not everyone is fully bought in at current prices. At $493.16, AMD trades at a price-to-earnings ratio of 161.69x, well above its five-year median P/E of 92.64x.

GuruFocus places AMD’s GF Value at $231.63, suggesting the stock is trading at a 112.9% premium to its estimated intrinsic value.

AMD’s GF Score stands at 81 out of 100. It scores a perfect 10 on growth and a 9 on financial strength, but just 1 out of 10 on valuation.

Insider activity has also leaned negative, with $122.1 million in AMD stock sold by insiders over the past three months.

AMD also joined Broadcom, Intel, Microsoft, and Nvidia in releasing the Multipath Reliable Connection protocol, aimed at improving AI training cluster performance. Q2 earnings will be the next checkpoint for whether the momentum holds.

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