Advanced Micro Devices (AMD) stock has rallied 136% year-to-date, driven by strong demand for the chip giant's AI data center CPUs (central processing units) and GPUs (graphics processing units). Earlier this month, AMD reported a 50% jump in its Q2 FY26 revenue, with data center sales surging 107%. Most Wall Street analysts remain bullish on AMD stock, as they expect continued strength in demand for the company's server CPUs and AI GPUs.

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During the Q2 FY26 conference call, CEO Lisa Su said that AMD now expects its data center sales to double in 2027. Also, the company expects server revenue to increase by more than 80% on an annual basis in the second half of FY26.

BofA Is Bullish on AMD's Growth Potential

Recently, Bank of America analyst Vivek Arya reiterated a Buy rating on AMD stock with a price target of $620. The 5-star analyst highlighted greater visibility into demand in the server CPU market and said that AMD is the "best-positioned CPU vendor."

Following the Q2 earnings season and considering strong AI compute and memory demand trends, Arya increased his calendar year 2030 server CPU total addressable market estimate to $210 billion from the previous forecast of about $170 billion, indicating a massive jump from about $35 billion in 2025. Arya highlighted that these increased estimates reflect continued inflection across agentic workloads.

"AMD remains our top CPU pick on its wide breadth of portfolio and dual leadership – highest‑frequency (compute/head node rack) and highest core/thread count (agentic AI)," said Arya. He highlighted that AMD's Zen 6 Venice CPU has up to 256/512 cores/threads, compared to Intel's (INTC) Diamond Rapids 192/192 and Nvidia's (NVDA) Vera 88/176. Arya also noted the solid execution and supply visibility of AMD's Zen 6/2nm.

Phillip Securities Sees Solid Upside in AMD Stock

Like Arya, Phillip Securities analyst Yik Ban Chong is also bullish on AMD's growth potential. The 5-star analyst has a Buy rating on AMD stock with a price target of $755. Chong noted that the 107% rise in AMD's Q2 FY26 data center revenue marked the biggest year-over-year growth since the third quarter of FY24. He explained that this strength was driven by MI350 GPU demand expanding across AI labs, cloud providers, major AI start-ups, and sovereign AI deployment.

He added that AMD expects its data center revenue to more than double year-over-year in FY27, driven by higher Helios volumes, MI450 GPU, and the sixth-generation Venice server CPU. Chong lowered his PATMI (profit after tax and minority interest) estimate for FY26 by 8%, citing subdued demand in AMD's client and gaming businesses. He expects both these businesses to face a cyclical downturn due to elevated memory costs.

Meanwhile, Chong increased his FY27 revenue and PATMI estimates by 4% each, thanks to higher visibility into demand for Helios, MI450 GPUs, and Venice server CPUs. The analyst added that AI startup Anthropic is expected to deploy 2 GW of MI450 GPUs in Helios starting from the first half of next year, which he projects could contribute an additional $30 billion to AMD's top line. Finally, Chong believes that AMD's premium valuation (69.9x FY26 P/E) is justified, as its GPUs and server CPUs are well-positioned to capture agentic AI-driven demand.

Is AMD Stock a Buy, Sell, or Hold?

Overall, Wall Street has a Strong Buy consensus rating on Advanced Micro Devices stock based on 27 Buys and six Holds. The average AMD stock price target of $647.04 indicates about 28% upside potential.