Aletheia recently issued a research update suggesting that current projections for Advanced Micro Devices Inc. (NASDAQ:AMD) in the server CPU segment might underestimate the potential growth. The chip manufacturer’s shares have shot up more than 106% over the previous year, now trading around $253.73, approaching their 52-week peak of $267.08 as investors remain optimistic about sustained expansion.
In early January, Aletheia established what it described as a "constructive baseline" for AMD’s server CPU business prospects. The firm forecasted fiscal year 2026 revenue at $14.5 billion, representing a 42% increase compared to a projected $10.2 billion for fiscal 2025. This outlook incorporated expectations of a 27% increase in unit shipments coupled with an 11% rise in the average selling price (ASP) of AMD’s server processors.
Recently, Aletheia has noted that input from cloud service providers (CSPs) and memory suppliers signals even more favorable market dynamics for fiscal 2026 than previously accounted for. Their research note, entitled "Are We Bullish Enough on Server CPU?", intimates that AMD’s server business could achieve growth rates beyond the already ambitious forecasts.
Furthermore, investment firm KeyBanc sustains an Overweight rating on AMD, setting a price target of $270 ahead of the company’s earnings report. KeyBanc expects the semiconductor maker to surpass consensus estimates, buoyed by robust demand for server CPUs and the strength of its upcoming Turin processors. The firm highlights AMD’s near sell-out status for server CPUs extending through 2026, with indications of potential price hikes forthcoming.
In contrast, Bernstein has revised AMD’s price target downward to $225, factoring in the progress of AMD’s artificial intelligence initiatives, noting that OpenAI remains the sole significant customer utilizing AMD’s Helios chips thus far. Enhancing AMD’s leadership, the company has appointed KC McClure, ex-Chief Financial Officer of Accenture, to its board of directors.
Separately, announcements revealed a deal between AMD and Riot Platforms to deploy 25 megawatts of IT infrastructure at Riot’s Rockdale site, with optional expansions planned. Piper Sandler views this collaboration positively and reaffirms an Overweight rating on Riot Platforms. These developments collectively underscore AMD’s strategic industry engagements and expanding footprint.