HSBC Upgrades AMD, Shares Gain 4%
Summary
HSBC has upgraded Advanced Micro Devices (AMD) to 'Buy' with a $200 price target, citing strong optimism for the company's AI product roadmap and revenue potential, particularly from the MI350 series chips. The firm projects AMD's FY2026 AI revenue at $15.1 billion, significantly above consensus, due to higher-than-expected pricing. This upgrade, despite a recent rally, suggests the market has yet to fully price in AMD's AI-driven growth, leading to a 4% share gain today.
HSBC Upgrades AMD: AI Optimism Drives 4% Share Surge
Publication Date: July 10, 2025, 10:41 PM UTC
Related Stock: Advanced Micro Devices (NASDAQ: AMD)
HSBC has significantly upgraded its outlook on Advanced Micro Devices (AMD), moving its rating from 'Hold' to 'Buy' and setting an ambitious new price target of $200. This upgrade reflects growing confidence in AMD's artificial intelligence (AI) product roadmap and its substantial revenue potential within the burgeoning AI market. Following this positive revision, AMD's shares experienced a notable gain of over 4% during today's trading session.
Driving Factors Behind the Upgrade
The core of HSBC's revised stance lies in its optimistic projection for AMD's fiscal year 2026 (FY2026) AI revenue. The firm now anticipates a significant upside, primarily driven by stronger-than-expected pricing for AMD's recently launched MI350 series chips. This development marks a considerable shift from HSBC's earlier concerns, voiced in January, regarding AMD's competitive positioning within the fiercely contested AI GPU landscape.
Revised AI Revenue Projections
HSBC's latest forecast for AMD's FY2026 AI revenue stands at an impressive $15.1 billion. This figure represents a substantial 57% increase over the current market consensus, which hovers around $9.6 billion. This sharp upward revision is directly attributed to AMD's ability to command a higher pricing premium for its AI offerings than initially anticipated by the market.
Future AI Product Pipeline
Further bolstering HSBC's confidence is the upcoming MI400 rack architecture, slated for introduction in 2026. While the financial impact of this future product is still in its early stages of modeling, HSBC believes that the MI400 series holds significant long-term potential to solidify and enhance AMD's strategic positioning within the AI sector.
Market Underestimation and Future Re-rating
Despite a recent 14% rally in AMD shares following the company's AI Day in June, HSBC contends that the market has yet to fully incorporate the impending wave of AI-driven growth into AMD's valuation. The firm anticipates that this sustained momentum from AI advancements will catalyze a broader re-rating of the stock, suggesting considerable room for upside from its current trading levels.
HSBC's upgrade underscores a belief that AMD is poised to capture a substantial share of the AI market, driven by its innovative product pipeline and robust pricing power. Investors will be closely watching how these projections translate into actual financial performance in the coming quarters.