Buy AMD shares as graphics chip sales boost earnings, says Citi
Citi upgraded Advanced Micro Devices to Buy from Neutral, citing stronger GPU sales and AMD’s potential to become a second GPU supplier to Nvidia. The bank raised its price target to $575 (over 17% above Thursday’s close) and expects AMD to exceed $20 EPS by 2028. Citi analyst Atif Malik said Meta could be a larger AI GPU customer than expected, and raised AI revenue estimates to $33B in 2027 and $50.8B in 2028.
Street read-through shifts toward AMD winning more AI GPU share, anchored by a cited Meta customer expansion and higher AI sales estimates.
Citi upgraded AMD to Buy and raised its price target to $575, citing GPU demand and Meta as a larger AI customer.
Near-term upside bias as traders reprice AMD’s AI revenue trajectory; follow-through depends on whether Meta/AI GPU demand validates the upgrade thesis.
Background
Citi argues AMD is emerging as a second GPU source behind Nvidia and highlights a Meta hyperscaler relationship tied to a multiyear GPU deployment deal.
Why it matters
The upgrade and raised PT are intended to reset expectations for AMD’s AI revenue growth, with Meta positioned as a larger-than-expected customer via custom MI450 GPUs.
Market relevance
This is a sell-side catalyst that can move AMD positioning by reframing AI GPU demand and customer mix toward AMD, especially via Meta.
Market effects
Reinforces the AI accelerator narrative that AMD can gain traction in hyperscaler GPU deployments, potentially pressuring Nvidia’s perceived share over time.
No specific regional catalyst beyond US semiconductor sentiment.
Hyperscaler GPU demand (Meta) is global capex-driven, so read-through can influence broader AI chip pricing and positioning.
Alternative perspectives
Meta’s GPU mix and performance/TCO claims may not translate into sustained AMD share gains; Nvidia’s dominance and ecosystem lock-in could limit AMD’s upside.
The piece is dependent on Citi’s assumptions (e.g., gigawatt-to-revenue conversion and AI sales ramp); without new AMD guidance or contract details, the market may fade the upgrade if subsequent checks don’t confirm.
Key entities
- companyAdvanced Micro Devices
Upgraded by Citi to Buy; PT raised to $575; thesis centers on GPU demand and AI sales growth.
- companyMeta Platforms
Cited as a key hyperscaler customer expected to be larger for AMD AI GPUs, including custom MI450s.
- companyNvidia
Referenced as the dominant GPU supplier and as having its own GPU deal with Meta for context.
- financial_institutionCiti
Issued the upgrade and price-target increase driving the immediate sentiment shift.
