Analyst Overhauls AMD Stock Price Target as Gap with Nvidia Widens

As the gap between Advanced Micro Devices (AMD) and Nvidia (NVDA) widens in the high-growth markets of artificial intelligence (AI) and data center, analysts are revising their price targets for AMD stock. The widening gap has led to a more cautious outlook for AMD's stock performance, with analysts predicting a 53.20% increase from the current stock price of $127.33, compared to Nvidia's 108.12% increase from its 52-week low. The average analyst rating for AMD has also dropped to a "Strong Buy," compared to Nvidia's "Strong Buy" rating.



The widening gap between AMD and Nvidia is primarily due to Nvidia's dominant position in the AI market, driven by its industry-leading combination of GPU hardware and CUDA software platform. Nvidia's software moat around CUDA is viewed as a key competitive advantage that will make it difficult for rivals to displace Nvidia's leadership position. In contrast, AMD is expected to carve out a profitable niche in AI inference but faces challenges in matching Nvidia's success in AI training.



Despite the challenges, AMD remains a strong contender in the AI and data center markets. The company's AI revenue is expected to reach $9.5 billion in 2025, up from $5.2 billion, driven by the MI325X GPU, which competes with Nvidia's H200. Additionally, AMD's server revenue is expected to grow 10% year-over-year to $8.5 billion in 2025, fueled by the Turin chips outperforming Intel's Granite Rapids.



Analysts remain bullish on AMD's long-term prospects, with a consensus of 31 Wall Street analysts expecting the AMD share price to surge 47% in the next 12 months, reaching $184. However, the widening gap with Nvidia has led to a more cautious outlook for AMD's stock performance in the near term. Investors should closely monitor the developments in the AI and data center markets, as well as the progress of AMD's product roadmap and competitive positioning, to make informed investment decisions.