Raymond James Upgrades AMD to Strong Buy and Raises Its Target to $641

Raymond James upgraded Advanced Micro Devices (AMD) to Strong Buy on August 25 and raised its price target from $565 to $641, citing a server CPU market expected to grow at a 44% compound annual rate to about $201 billion by 2030. AMD shares rose 4.91% to close at $479.18 after analyst Simon Leopold's upgrade, following AMD's second-quarter data center revenue of $6.7 billion, up 107% year over year.

Raymond James just told Wall Street that AMD's price was too low for the AI server story now forming around it. The firm upgraded the chipmaker to Strong Buy on August 25 and lifted its target from $565 to $641. AMD didn't need another polite nod from the sell side. It got a real re-rating. Shares rose 4.91% on August 25 to close at $479.18 after Raymond James analyst Simon Leopold moved the stock from Outperform to Strong Buy, according to Investor's Business Daily and Yahoo Finance. The new target sits above Yahoo Finance's roughly $613 average analyst target, but it isn't the market's ceiling. That's the point. Raymond James is no longer treating AMD as a cheaper way to play Nvidia. It is treating server CPUs as their own AI trade. The CPU story finally gets priced Leopold's call turns on a plain idea that investors often skip while chasing accelerator numbers: every AI rack still needs CPUs to manage the work around the GPUs. According to Investor's Business Daily, Raymond James now expects the server CPU market to grow at a 44% compound annual rate and reach about $201 billion by 2030. That forecast is the spine of the upgrade, not a small tweak to a spreadsheet. You can see why the firm moved. AMD reported second-quarter data center revenue of $6.7 billion for the period ended June 27, up 107% from a year earlier, with demand coming from EPYC processors and Instinct GPUs. Total quarterly revenue was $11.5 billion, so data center sales accounted for about 58% of the company. That's no side business. It is the company Wall Street is now trying to value. Intel is still in the room, and pretending otherwise would be silly. In its own June-quarter filing, Intel said Data Center and AI revenue rose 59% from a year earlier. But AMD's growth was faster, and its EPYC chips have become the clearer share-gain story in the server market. Leopold wrote that AMD offers "the strongest combination of direct earnings leverage, data-center positioning and market-share gains," according to a Stocktwits summary carried by TradingView. That's a big claim. It also has actual numbers under it. AMD posts record $11.5 billion quarter but the stock still falls almost 9% https://startupfortune.com/amd-posts-record-115-billion-quarter-but-the-stock-still-falls-almost-9/ AMD's data center revenue more than doubled to $6.7 billion in the second quarter, pushing total revenue to a record $11.5 billion, but the stock fell nearly 8% after hours on margin concerns tied to its Helios AI server ramp. Gaming revenue collapsed 31% as AMD deliberately exits legacy console chip contracts to focus on EPYC and Instinct. - why did AMD stock drop after https://startupfortune.com/amd-posts-record-115-billion-quarter-but-the-stock-still-falls-almost-9/ - AMD data center revenue growth disappointing https://startupfortune.com/amd-posts-record-115-billion-quarter-but-the-stock-still-falls-almost-9/ This is broader than AMD The market reaction didn't stop with one ticker. AMD led the move, but the chip trade was firm across the board ahead of Nvidia's fiscal second-quarter results, which were scheduled for after the close on August 26. Investor's Business Daily reported that Nvidia rose more than 2% on August 25, while Micron and other chip names also gained as the Nasdaq advanced. Frankly, that's the tell. When Nvidia rises but doesn't swallow the whole story, investors are looking past the most famous GPU name and pricing the rest of the stack: CPUs, memory, networking, tools that make the expensive accelerators useful. You don't have an AI factory with one chip. You have racks full of parts that all have to earn their place. AMD has been trying to make that argument with products as well as earnings. In its second-quarter materials, the company pointed to EPYC CPUs, Instinct MI350 Series GPUs, Pensando networking and the Helios rack-scale system. Some of that language can sound like chipmaker brochure copy, so ignore the shine and look at the shape of the portfolio. AMD wants to sell more of the rack, not only the processor that sits inside it. The risk is obvious. A $641 target depends on a five-year server CPU model, and five years is a long time in semiconductors. Roadmaps slip. Customers pause orders. Intel cuts prices. Nvidia pushes deeper into CPUs. Arm-based designs keep circling the data center. If AMD misses a quarter, the same model that made the target look sober can start looking too neat. But the upgrade still says something useful for you as an investor. The AI infrastructure trade is spreading from the obvious winner to the companies that make the surrounding machinery work. Nvidia still builds the chip everyone wants most. AMD's August 25 move shows Wall Street is getting more willing to pay for the parts sitting next to it. 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