Raymond James Raises AMD Price Target to $641, Sees It Challenging Intel's CPU Dominance

TradingKey - On August 25, Eastern Time, Wall Street investment bank Raymond James upgraded Advanced Micro Devices (AMD) from "Outperform" to "Strong Buy," noting that its strategic positioning in the server CPU market is poised to challenge Intel's (INTC) long-standing dominance.

Meanwhile, Raymond James raised its price target for AMD from $565 to $641, representing a premium of approximately 40% over its closing price of $456.75 on August 24. As of press time, AMD was up 2.98% in pre-market trading at $470.34.

[Source: TradingView]

Raymond James analyst Simon Leopold expanded the "AI Factory" analytical framework to the server CPU market, asserting that as the deployment scale of AI data center accelerators surges, the role of the CPU is evolving—it is no longer merely a traditional processor, but also needs to coordinate accelerator operations and manage inference workloads.

The bank forecasts that the server CPU market is expected to grow to approximately $201 billion by 2030, representing a compound annual growth rate (CAGR) of 44%, which is lower than AMD's own market valuation estimate of $220 billion.

Leopold noted in the report that AMD possesses the strongest earnings growth potential in the semiconductor sector, while leading its peers in data center business positioning and market share expansion potential. As CPU demand surges, AMD is accelerating its market share gains from Intel.

According to Mercury Research statistics, in the second quarter of 2026, AMD's overall x86 processor shipment share surpassed 30% for the first time, reaching 30.7%, while Intel fell to 69.3%—marking the first time AMD crossed the 30% threshold since 1995. In the server CPU market segment, AMD's share has risen to 34.5%, up 7.3 percentage points year-over-year.

In the second quarter of 2026, AMD's total revenue reached $11.5 billion, up 50% year-over-year to a record high; the data center business contributed $6.7 billion, up 107% year-over-year, with its proportion of total revenue jumping from 42% in the same period last year to 58%.

AMD's current trailing price-to-earnings ratio exceeds 115x, with a price-to-sales ratio of about 18x. The consensus rating among Wall Street analysts for AMD is "Strong Buy," with 27 rating it a "Buy," 6 rating it a "Hold," and an average price target of approximately $647.

[Source: TipRanks]

However, not all institutions share this uniform optimism. Although Phillip Securities maintained its "Buy" rating, it lowered its FY2026 earnings forecast by 8%, mainly citing persistent weakness in the PC client market: desktop CPU shipments fell more than 20% year-over-year in the second quarter, while DIY demand weakened due to price increases in memory and SSDs.

Raymond James' rating upgrade provides fresh support for the bullish thesis on AMD. However, AMD's current valuation is already at a high level; if the growth rate of data centers slows down in future quarters, its current P/E ratio of over 115x will face a test.