On January 13, KeyBanc analyst John Vinh upgraded Advanced Micro Devices stock from Sector Weight to Overweight, setting a price target of $270.00.
The firm noted surging hyperscaler demand for AMD, alongside stronger-than-expected server demand and improving visibility across CPU and AI GPU segments.
Earlier, KeyBanc had downgraded AMD to Sector Weight due to concerns about a potential demand gap between the MI355 and the launch of its rack-scale Helios platform with MI455, expected around late 2026. Updated supply chain checks have since eased these concerns.
Supply chain data revealed the recent surge in hyperscaler demand has led AMD to be almost completely sold out of server CPUs for 2026. The company may also consider a price increase of about 10-15% in the first quarter of 2026.
KeyBanc estimates AMD's server CPU and AI GPU business will show strong growth, driven by hyperscaler demand and a ramp in MI455 and MI355 accelerators. AI revenues are likely to reach $14 to $15 billion this year.
"We estimate server CPU for AMD will grow at least 50% this year," the firm stated. "Regarding AI GPUs, we're seeing indications of 200,000 MI355 GPUs in the first half and a significant ramp of MI455 in the second half, of which 290,000 to 300,000 is targeted for its rack-scale solution Helios. It remains unclear how many racks AMD will be able to ship; similar to NVDA, we expect AMD to recognize significant amounts of MI455/Helios revenues as it sells its components to its ODM partner ZT Systems. We estimate that this will support AI revenues this year in the range of $14 billion to $15 billion."
Advanced Micro Devices develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.