Analyst upgrade and shifting AI workloads signal major upside for chipmaker
Shares of Advanced Micro Devices (AMD) surged nearly 10% in premarket trading Friday, reaching fresh all-time highs as investor optimism around artificial intelligence and data center demand continues to build. The rally was sparked by an upgrade from D.A. Davidson, which raised its rating on AMD to Buy from Neutral and significantly increased its price target.
The upgrade follows strong earnings and guidance from Intel, which analysts view as a positive signal for the broader semiconductor sector—particularly for companies with exposure to central processing units (CPUs). While GPUs have dominated the initial wave of AI development, a shift toward AI agents and inference workloads is driving renewed importance for CPUs.
According to analyst Gil Luria, CPUs are “reinserting themselves as an indispensable foundation of the AI era,” as the evolving demands of AI applications extend beyond traditional GPU-heavy tasks. This transition is expected to significantly expand the total addressable market for CPU providers, positioning AMD to benefit from a structural increase in demand.
D.A. Davidson raised its price target on AMD to $375 from $220, citing improved visibility into the company’s role in the ongoing data center buildout. As hyperscalers and enterprises scale AI infrastructure, AMD’s expanding CPU portfolio is becoming increasingly critical to supporting real-world AI applications, including automation, data processing, and enterprise workflows.
The stock’s latest move adds to an already impressive run, with semiconductor companies leading the broader market rally this year. AMD, in particular, has been at the forefront, driven by strong execution and growing relevance in both GPU and CPU markets.
As AI adoption accelerates globally, AMD appears well-positioned to capitalize on multiple layers of demand, reinforcing a bullish outlook for the stock.
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