Goldman Sachs Initiates Coverage on AMD with Neutral Rating and $140 Price Target

Goldman Sachs initiated coverage on AMD with a "Neutral" rating and a $140 price target. The firm emphasized a balanced outlook for the company's stock, reflecting its market position and potential growth trajectory in the semiconductor industry. The announcement comes amidst ongoing developments in the sector, where AMD continues to play a pivotal role.

Goldman Sachs has initiated coverage on Advanced Micro Devices (NASDAQ: AMD) with a Neutral rating and a price target of $140. The investment bank, in its first report on AMD, has outlined a balanced outlook for the company's stock, reflecting its market position and potential growth trajectory in the semiconductor industry.

According to Goldman Sachs, AMD's current valuation appears fair, with the stock trading at a P/E ratio of 101.36 and showing strong momentum with a 19.28% return over the past six months. The firm views AMD as a fabless provider of X86-based Server and PC CPUs, custom SoCs, and merchant GPUs, noting the company's impressive execution and market share gains in the X86 Server CPU and PC CPU markets.

Goldman Sachs expects AMD's share gains in the Server CPU market to slow due to increasing penetration by ARM-based solutions, despite the overall positive trend continuing. The firm believes AMD's merchant GPU solutions will likely gain limited market share against Nvidia (NASDAQ: NVDA)'s established position, which is strengthened by software advantages, and against ASICs that continue to capture more wallet share.

Goldman Sachs also notes that AMD is expected to remain in investment mode as it pursues opportunities in AI accelerators, which may result in earnings growth that falls short of investor expectations. The firm's cautious stance reflects the intense competition in AI and GPU spaces, where AMD faces stiff competition from established players like Nvidia and ASICs.

The announcement comes amidst ongoing developments in the sector, where AMD continues to play a pivotal role. In other recent news, AMD is set to release its fiscal second-quarter 2025 financial results on August 5, 2025. KeyBanc Capital Markets has reiterated its Sector Weight rating on AMD, noting that the company is projected to achieve $7 billion to $8 billion in AI revenues this year, driven by strong demand for its MI355 AI GPU. Meanwhile, Truist Securities maintained its Hold rating on AMD, highlighting ongoing debates about the company’s datacenter GPU business and its customer motivations. Mizuho has raised its price target for AMD to $152, citing strong demand for AI accelerators and adjusting its revenue estimate for the June quarter to $7.40 billion. Melius Research upgraded AMD from Hold to Buy, increasing its price target to $211, based on optimistic AI growth prospects and potential earnings per share reaching $8 within two years.

These developments reflect significant interest and varying perspectives from analysts on AMD’s growth trajectory in the AI and GPU markets. While the Neutral rating from Goldman Sachs indicates a cautious approach, the company's strong fundamentals and growth prospects in AI and GPU markets continue to attract analyst attention.

References:
[1] https://in.investing.com/news/analyst-ratings/amd-stock-initiated-with-neutral-rating-by-goldman-sachs-at-140-93CH-4906452
[2] https://finance.yahoo.com/news/advanced-micro-devices-amd-maintains-061946441.html
[3] https://www.nasdaq.com/articles/2-highly-ranked-semiconductor-stocks-buy-now-crdo-nvmi
[4] https://www.techi.com/amd-stock-goldman-neutral-rating-ai-growth/