Raymond James Elevates AMD to Strong Buy, Boosts Target to $641

On August 25, Raymond James upgraded AMD to a Strong Buy and lifted its price target from $565 to $641, signaling a shift in how the brokerage views the chipmaker’s role in the AI boom. The move came after the firm highlighted that every AI rack still requires powerful CPUs to orchestrate GPU workloads, a nuance often overlooked by investors chasing accelerator numbers.

AMD’s shares surged 4.91% on the day, closing at $479.18, a level that sits above the roughly $613 average target quoted by Yahoo Finance. The upgrade is rooted in a bullish outlook for the server‑CPU market, which Raymond James now projects to grow at a 44% compound annual rate and reach about $201 billion by 2030.

The catalyst for the rating change was AMD’s second‑quarter data‑center results: revenue climbed $6.7 billion—an 107% jump YoY—driven by EPYC processors and Instinct GPUs. Data‑center sales now account for roughly 58% of the company’s $11.5 billion total revenue, underscoring the segment’s importance.

Intel, meanwhile, reported a 59% rise in its own data‑center and AI revenue for the same quarter, but AMD’s growth pace and EPYC’s market‑share gains give it a stronger narrative. Analyst Simon Leopold noted that AMD offers the “strongest combination of direct earnings leverage, data‑center positioning and market‑share gains.”

Despite the upside, AMD’s stock slipped nearly 8% after hours, largely due to margin concerns tied to its Helios AI‑server ramp. Gaming revenue fell 31% as the company phased out legacy console chip contracts to focus on EPYC and Instinct.

The broader market reflected a similar sentiment. AMD’s rally was mirrored across the chip sector ahead of Nvidia’s fiscal second‑quarter results, with Nvidia up more than 2% on August 25 and peers like Micron also posting gains. Investors are increasingly pricing the entire AI stack—CPUs, memory, networking and supporting tools—rather than focusing solely on the headline GPU names.

In short, Raymond James’ upgrade marks a recognition that the future of AI will hinge on a balanced ecosystem of components, with AMD’s server CPUs positioned as a key driver of that growth.