Analyst With $200 Advanced Micro Devices (AMD) Price Target Explains Why He’s Bullish, Sees ‘Big Reversal’ in AI Revenue

Advanced Micro Devices Inc (NASDAQ:AMD) is one of the 10 Buzzing Stocks Everyone is Talking About.

HSBC’s Frank Lee explained in a recent program on CNBC why he raised his price target on Advanced Micro Devices Inc (NASDAQ:AMD) to $200. Lee believes AMD could rake in $8 billion in AI revenues and talked about other growth catalysts for the stock that’s up 29% so far this year.

“I think the main thing is that, you know, compared to where we were at the beginning of the year where we got a lot more conservative, in terms of the outlook of Advanced Micro Devices Inc (NASDAQ:AMD) AI revenue. We see some changes in the last couple months that definitely much more constructive, and I think at the beginning of the year, there was very little visibility. The MI325 chip that they launched in the, in in the first quarter wasn’t getting quite the feedback we were expecting. But now as we see the MI355, the feedback’s been a lot more positive, and also we see a big uplift in pricing—much more than we previously expected—and we do see the hyperscalers seem to be interested. So hence we think there could be a big reversal in terms of the AI revenue for for this year. So we now have more than eight billion in revenues, which is considerably higher than the consensus around six.”

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Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.

Longriver Partners Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second quarter 2025 investor letter:

“Nvidia’s NVLink, its high-bandwidth interconnect, underpins training at scale, where GPUs must coordinate across racks. NVLink Fusion, announced this year, may extend that advantage by letting custom chips plug into Nvidia’s system rather than replace it. However, many inference tasks can be handled independently, one GPU at a time. That lowers the importance of networking, and with it, Nvidia’s edge in tightly integrated systems.

This has given Advanced Micro Devices, Inc. (NASDAQ:AMD) a window to become more than a second source. Its MI300X is now deployed at Microsoft, Meta, Oracle, and Dell. In some inference workloads, it beats Nvidia’s H100. As one expert put it, “ROCm used to be a science project. Now we’re finally seeing it run real workloads.” AMD plans to ship full-rack MI400 systems next year. It still trails in training, but inference gives it a real wedge into the market.

AMD is also leaning into openness. ROCm is open source, its interconnects run over Ethernet, not proprietary links, and it is sticking with x86 CPUs. That may appeal to buyers wary of lock-in or reluctant to cross-compile for ARM.”

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Disclosure: None. This article is originally published at Insider Monkey.