Advanced Micro Devices (AMD) shares advanced roughly 2% in Tuesday's session after Piper Sandler reaffirmed its Overweight rating and $600 price target on the chipmaker. The stock traded near $504.62, extending its 12-month gain to more than 213%.
The bullish stance follows AMD's third-quarter pre-quiet-period call, during which management offered updates on product ramps and demand. Analyst David O'Connor said the tone was reassuring, with progress across CPU and GPU lines on track. He noted that demand continues to exceed available supply across AMD's portfolio, a dynamic that supports the company's guidance and could allow for upside.
O'Connor highlighted several key areas, including the ramp of Helios servers, Venice CPUs, the Optics scale-up architecture, high-bandwidth memory supply, and broader memory dynamics. He also touched on margins and the client and gaming segments, describing the business as "operating at full speed." Piper Sandler views AMD as a prime beneficiary of the growth in agentic AI, a theme the firm explored in its recent report "Starving for Compute."
The positive sentiment is not isolated to AMD. Bank of America analysts, led by Vivek Arya, project the semiconductor industry's total addressable market will nearly double from $1.7 trillion in 2026 to $3.2 trillion by 2030. Growth is expected to be driven primarily by memory and data centers, with incremental recovery in automotive and industrial sectors.
Despite concerns about a potential slowdown in AI infrastructure investment, BofA sees no signs of weakening customer orders, long-term agreements, capacity commitments, or pricing. Recent DRAM and NAND memory prices remained broadly flat week over week, while GPU rental prices have been climbing. Nvidia's B200 rental rate stood at $5.72 per hour, up consistently over the past two months and less than 10% below its March peak of roughly $6.10.
AMD has also indicated it is not seeing any slowdown in customer orders, aligning with the broader industry picture. BofA noted that 2027 remains largely fully booked or contracted across compute, networking, and memory suppliers, and 2028 could also stay constrained due to stronger demand for CPUs, XPU attachment, new optics-based scale-up technologies, and AI accelerators from ASIC and GPU vendors.
While the semiconductor sector may remain rangebound in the near term, BofA identified several names that could show resilience. In compute, the bank highlighted Nvidia and AMD; in networking, Marvell; and in analog, Analog Devices and onsemi. If market momentum returns, Micron, Lam Research, Applied Materials, and Intel could also lead gains.
Investors have been closely watching AI-related names amid broader market volatility. For context, Wells Fargo trimmed its S&P 500 target on tech risks, while Alphabet shares slid on similar concerns. Meanwhile, Qualcomm's AWS deal underscores the ongoing demand for data center compute.
This article is for informational purposes only and does not constitute financial advice.
