Key Takeaways
- AMD stock rose 6% today after William Blair upgraded it to Outperform, on the same day Nvidia’s CEO Jensen Huang resigned and Nvidia was downgraded by several firms.
- AMD’s own numbers support the upgrade, and Nvidia’s turmoil doesn’t add much to it.
- Analysts have raised their 2027 earnings estimate for AMD to $17.69 a share, from $15.33 three months ago.
- The stock trades a little above its 5-year average forward P/E, and the $659 consensus target sits 12% above today’s price.
Advanced Micro Devices (AMD) is up 6% today, and two things are helping it. William Blair upgraded the stock to Outperform from Market Perform this morning, and Nvidia (NVDA), its biggest rival in AI chips, lost its CEO.
Jensen Huang resigned, and KeyBanc, Melius and Evercore ISI all downgraded Nvidia, which fell 6%. AMD, already up 127% over the past year, kept climbing.
William Blair’s case runs through AMD’s own chips
William Blair says the risk/reward has shifted in AMD’s favor, though it set no price target. It sees room for AMD’s Instinct GPUs to gain share, and for its CPUs to win more work inside customers’ custom chip programs. AMD CEO Lisa Su said on the third-quarter call that OpenAI picked AMD’s EPYC processors as the host CPUs for its first custom accelerator platforms.
Third-quarter revenue grew 45% to $13.4 billion, Data Center revenue nearly doubled to $8.5 billion, and Su now expects revenue to grow more than 80% in 2027.
But “It is true that demand is higher than supply,” Su said on the call. So customers spooked by Nvidia’s boardroom can’t move many 2027 orders to AMD in a hurry.
TIKR tracks 53 analysts on AMD. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on AMD, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See AMD’s Analyst Ratings
The numbers back the upgrade
The Street’s consensus target has climbed from $272 a year ago to $659:
That’s 12% above today’s price. Targets from the 53 analysts covering the stock run from $525 to $1,250.
The targets rose because the earnings estimates did. Analysts expect normalized EPS of $8.08 this year and $17.69 in 2027, up from $4.17 in 2025:
Three months ago, the 2027 estimate was $15.33.
AMD traded at 37x forward earnings at the last close. That’s a bit above its 5-year average of 35x and far below the 67x it hit at the end of June:
Today’s jump pushes it a little higher.
Nvidia’s mess is the least of it
The cash is the weak spot. Free cash flow was just $554 million in the third quarter as AMD built inventory up to $11.5 billion, and its biggest Helios customers are still burning cash, OpenAI above all.
Even so, William Blair has the better side of this one: AMD costs about what it usually does, and its earnings estimates keep going up. I just wouldn’t buy it because of Nvidia’s troubles, since a new CEO at Nvidia doesn’t give AMD a single extra wafer.
The next real test is fourth-quarter results in early February, the first quarter with Helios racks shipping in volume. Revenue near $17 billion and a non-GAAP gross margin around the guided 55% would keep the case intact.
So what is AMD stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
