Chipmaker AMD recently saw its stock surge by ~7% after analysts at CFRA upgraded their rating for the company to Strong Buy, raising the stock price target from $125 to $165. This marks another win for AMD after Melius Research also upgraded their rating, projecting a target of $175, up from $110. 
Both CFRA and Melius point to increasing demand for AI GPUs, particularly from governments and hyperscalers, as a catalyst for AMD’s growth.
CFRA analyst Angelo Zino believes that by 2026, AMD can close the competitive gap with NVIDIA, the market leader in AI GPU performance. The rise of AI-driven demand for chips, especially in AI inferencing, could give AMD an edge, and Zino sees their MI400x AI accelerator and acquisition of ZT Systems as pivotal factors in achieving this.
ZT Systems, purchased earlier this year, provides AMD with a stronger foothold in the server rack market, and CFRA expects this to help the company secure high-profile clients like Oracle and OpenAI. These partnerships could open new doors for AMD, especially in the AI infrastructure space. The addition of sovereign AI demand and recovery in the GPU server market are also seen as growth drivers for the company.
Despite a rough start to 2025, where AMD’s stock lost 3.7% due to concerns about the PC market and its small share in AI GPU sales, recent news has fueled investor optimism. The stock rose by 6.8% after CFRA’s positive update, and AMD appears to be in a good position to challenge NVIDIA’s dominance in the near future.