Bank of America Securities has revised the price target for Sanmina-SCI Corp. (NASDAQ: SANM) upward, moving it to $190 from its prior $180. Despite this increase, the investment firm upheld a Neutral rating for the electronics manufacturing company as it approaches its fiscal first-quarter 2026 earnings announcement. Investors and analysts are carefully watching the firm’s collaboration with AMD (NASDAQ: AMD), especially as AMD shares are nearing their 52-week peak, having recorded an impressive 106% return over the past year.
Sanmina, a provider of electronics manufacturing services, plans to disclose its earnings after the market close on Monday, January 26. Analyst scrutiny is largely focused on the velocity at which Sanmina, including its ZT Systems subsidiary, can begin to generate revenue from AMD rack production. This revenue source is critical as income from NVIDIA rack builds is expected to decline. Notably, AMD itself is set to report earnings on February 3, a development that may reveal further details on the company’s artificial intelligence infrastructure strategies.
According to BofA's projections, revenue from NVIDIA racks currently contributes approximately $1 billion annually to Sanmina, underscoring a pressing need to establish new revenue streams. The investment bank forecasts that the initial half of calendar year 2026 will primarily involve qualification and testing phases for AMD’s MI400 series racks. Substantive revenue generation from these builds is expected to begin in the fourth quarter of 2026.
While recognizing opportunities stemming from the communications sector's recovery from inventory correction and ZT Systems’ comprehensive rack assembly capabilities, BofA maintains its Neutral stance. The bank highlights the balancing influence of macroeconomic uncertainties and Sanmina's operational challenges, including the learning curve associated with integrating ZT Systems and scaling production in partnership with AMD.
AMD currently holds a "GREAT" rating in InvestingPro's Financial Health assessment and demonstrates robust momentum, suggesting the partnership with Sanmina could be strategically beneficial despite transitional hurdles. For a broader context, InvestingPro offers in-depth analysis covering over 1,400 stocks similar to AMD, providing investors with valuable research insights.
Additional insights into AMD’s prospects come from cloud provider feedback reinforcing confidence in its server CPU segment. Research from Aletheia raises the possibility that current forecast models may undervalue AMD’s growth; their projections estimate server CPU revenue rising to $14.5 billion in fiscal 2026, a 42% jump from the anticipated $10.2 billion in fiscal 2025. KeyBanc has likewise sustained its Overweight rating on AMD, emphasizing a near sellout of AMD products through the end of 2026 and expecting AMD to surpass market consensus in its fourth-quarter 2025 earnings.
Further industry updates include Bernstein elevating AMD’s stock price target to $225, reflecting the company’s advancements within AI initiatives, despite OpenAI being the sole major announced customer for AMD’s Helios chips. AMD has also added KC McClure, formerly Accenture’s CFO, to its board, bringing deep financial and accounting expertise. Conversely, Goldman Sachs shows a preference for Broadcom and Nvidia over AMD within the compute ecosystem, citing their stronger ties to AI capital expenditures and innovation in networking technologies.
This combination of corporate maneuvers and shifting industry dynamics underscores the competitiveness and evolving strategies within the semiconductor sector.