AMD Stock Forecast: BofA Raises Price Target to $720 on AI Demand

Advanced Micro Devices (AMD) shares have surged 182.8% YTD, outperforming sector and industry peers. Growth is driven by AI infrastructure investments, strong demand for EPYC processors, and partnerships. Q3 2026 revenue is projected at $13B, up 41% YoY. Competitive pressures and supply constraints pose challenges. AMD trades at a forward P/E of 49.86X, higher than the sector average.

AMD (NASDAQ:AMD) agreed to acquire AI startup World Labs for $8.2B in stock, adding Fei-Fei Li as EVP and chief scientist. The deal, expected to close by 2026, is AMD's second-largest acquisition and aims to enhance its AI capabilities. AMD's stock trades at a premium, with a forward P/E of 106.29x and strong earnings growth expected.

Fermi and AMD have signed a credit support deal for Fermi's Project Matador data center campus in Amarillo, Texas. AMD will act as a guarantor for Fermi's financing, with Fermi expected to provide up to 650MW of data center space. The deal includes AMD's Instinct GPUs for AI workloads. Fermi's contract with TensorWave could be worth up to $6.5 billion over 15 years. Fermi aims to build a 17GW data center campus with diverse energy sources.

Fermi Inc. (FRMI) stock rose 18% after announcing a credit support agreement and partnership with AMD for its AI infrastructure project in Texas. The deal supports an initial 222 MW buildout, with potential expansion to 650 MW. Fermi has invested $1.5B in the project, aiming for 17 GW capacity. AMD sees the partnership as a way to support AI data center growth.

Apple rose 1% after launching HomeView smart home hub. Meta gained 2% with Truist raising its price target to $1,000. Bumble surged 56% on a $1.3B acquisition deal. Memory chip stocks fell due to valuation concerns. AI infrastructure stocks also declined. Fermi jumped 17% on a deal with AMD. JPMorgan, Wells Fargo, and Goldman Sachs reported mixed Q3 results. Johnson & Johnson, Domino's, and Syndax Pharmaceuticals reported earnings. Six Flags fell 16% after a roller coaster incident.

Fermi's shares rose 16% after AMD signed a credit support agreement for Fermi's 222 MW Texas AI project, addressing a key financing hurdle. The deal secures a $6.5B lease with TensorWave, crucial for Fermi's revenue growth projections, which analysts expect to reach $2.37B by 2028. The lease must close by Oct. 31, and Fermi still needs to secure project financing.