Bank of America Maintains Buy Rating on AMD, Sees Upside from Market Share Expansion

Bank of America analyst Vivek Arya maintains a Buy rating on Advanced Micro Devices (AMD) with a $200 price target, citing the company's continued market share gains at Intel's expense. Arya expects AMD's value share to rise to 30-31% by 2026/2027, driven by average selling price growth. He sees further upside supported by PC and server strength, as well as growth in accelerators. AMD was also added to BofA's "US 1 List" of top investment ideas.

Title: AMD's Stock Price Target: Analysts Bullish on Semiconductor Giant's Future

Advanced Micro Devices (AMD) continues to be a standout performer in the semiconductor industry, with analysts and market experts expressing optimism about the company's future prospects. Bank of America analyst Vivek Arya recently maintained a Buy rating on AMD with a $200 price target, citing the company's continued market share gains at Intel's expense. Arya expects AMD's value share to rise to 30-31% by 2026/2027, driven by average selling price growth. He sees further upside supported by PC and server strength, as well as growth in accelerators. AMD was also added to BofA's "US 1 List" of top investment ideas [1].

In its latest earnings report, AMD demonstrated a dual-play strategy, covering high-performance computing (HPC) and AI accelerators. The Data Center segment, which includes EPYC processors and Instinct GPUs, grew 14% year over year to $3.02 billion. Despite challenges from U.S. export restrictions on the MI308 GPU to China, the recently released MI350 series and EPYC processors are in high demand [1]. The MI350 is designed for HPC and generative AI, and its production is increasing, particularly among cloud providers and hyperscalers.

AMD's strategic alliances with Microsoft, OpenAI, and Meta have strengthened its position in the AI ecosystem. The company's EPYC Zen 5 architecture threatens Intel's dominance in cloud-based AI servers. An inventory charge of $800 million related to export restrictions caused AMD's Q2 2025 GAAP gross margin to fall to 40%, but non-GAAP gross margins, excluding one-time charges, would have been 54%, consistent with the company’s historical performance. The ramp-up of MI350 GPUs and strict cost control are expected to support management’s forecasted recovery in Q3 2025 margins to 54% [1].

AMD's journey to a $200 stock price target is not without risks. MI308 shipments may be delayed due to US-China tensions, and NVIDIA's market dominance in AI remains strong. However, AMD is bridging the gap thanks to its ecosystem partnerships, pricing discipline, and product roadmap. The company's $3 billion sale of ZT Systems’ data center infrastructure division to Sanmina provides a cash buffer for strategic investments [1].

AMD's Q3 2025 guidance points to a return to normalized profitability with revenue of $8.7 billion and non-GAAP gross margins of 54%. The company's strong financial performance and strategic positioning in the AI and HPC markets suggest that analysts' optimism is well-founded. Investors should closely monitor AMD's progress as it continues to navigate the challenges and opportunities in the semiconductor industry.

References:
[1] https://www.fxleaders.com/news/2025/08/22/amds-road-to-200-ready-for-a-game-changing-revaluation/