Advanced Micro Devices Inc. (NASDAQ:AMD) stock rose more than 4% on Tuesday after several Wall Street analysts raised their price forecasts, reinforcing optimism about the chipmaker’s artificial intelligence and server businesses. Broader strength in semiconductor stocks and renewed hedge fund buying also supported the rally.
The stock outperformed the broader market, with the Nasdaq gaining 1.35% and the S&P 500 rising 0.42%. Technology was the day’s best-performing sector.
Analysts Raise Price Forecasts
KeyBanc analyst John Vinh maintained an Overweight rating and raised his price forecast on AMD to $725 from $530.
The firm said AMD has secured additional server CPU capacity, supporting expected unit growth of 15% to 20% this year and more than 50% in 2027.
It also expects the MI455 AI GPUs and Helios platform to ramp in the second half of 2026, forecasting AI GPU revenue of $16.8 billion in 2026 and $48.5 billion in 2027.
KeyBanc added that AMD’s CoWoS advanced packaging supply has increased from 80,000 to 90,000 units this year and could reach 130,000 next year, easing AI supply constraints.
Bank of America analyst Vivek Arya also raised his price forecast to $620 from $550. TD Cowen analyst Joshua Buchalter increased his forecast to $675 on Monday.
Hedge Funds Turn Bullish On Chip Stocks
The rally also followed renewed institutional buying.
According to Goldman Sachs data shared by The Kobeissi Letter, hedge funds bought U.S. semiconductor stocks last week at the fastest pace in at least three-and-a-half years.
The buying followed two weeks of heavy selling and suggested investors viewed the recent pullback in chip stocks as largely complete. Semiconductor companies now account for about 10% of total hedge fund exposure, roughly double last year’s level but still below the nearly 14% peak reached in May.
AMD Stock Price Activity: Advanced Micro Devices shares were up 4.15% at $556.58 at the time of publication on Tuesday, according to Benzinga Pro data.
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