AMD’s data-center business could expand more rapidly than previously expected through the end of 2026 and into 2027, according to a new assessment from Wedbush Securities.
The investment firm raised its AMD stock price target from $450 to $600 while maintaining an Outperform rating. Wedbush also increased its revenue and earnings estimates after reviewing new information presented during AMD’s recent Advancing AI event.
Analyst Matt Bryson said recently announced agreements involving Microsoft and Anthropic increased the firm’s confidence in a substantial acceleration of AMD’s data-center AI chip and system revenue. Wedbush expects the strongest contribution to begin during the second half of 2026 and continue through 2027.
The revised outlook reflects AMD’s evolution from a supplier of individual processors into a broader computing-platform provider spanning graphics processors, central processing units, networking, software and complete AI systems.
For investors, the central issue is whether AMD can convert these partnerships and new products into revenue quickly enough to support its higher valuation and challenge Nvidia’s dominant position in artificial intelligence infrastructure.
Wedbush Raises AMD’s Price Target to $600
Wedbush increased its AMD price target by $150, or approximately 33%, from its previous forecast of $450.
The firm maintained its Outperform rating, indicating that it expects AMD stock to deliver stronger returns than the broader market or its relevant peer group over the analyst’s forecast period.
A price target is an analyst estimate rather than a guaranteed future value. It usually reflects assumptions about sales, earnings, future growth and the valuation multiple investors may be willing to pay.
The increase suggests that Wedbush believes AMD’s opportunity in AI infrastructure has become more valuable following its latest product and customer announcements.
However, the stock’s future performance will depend on actual deployments rather than analyst enthusiasm alone. AMD must manufacture the required chips, deliver complete systems and help customers bring the infrastructure into commercial operation.
Large AI agreements can take several quarters to become meaningful reported revenue because customers must test the technology, prepare data centers and install supporting networking and power systems.
AMD’s 2026 and 2027 Estimates Move Higher
Wedbush raised its 2026 earnings-per-share estimate to $7.22. For 2027, the firm increased its EPS forecast to $14.74 from $12.33.
The analyst also lifted its total revenue estimate for 2027 to $81.2 billion from $77.9 billion. The report placed AMD’s updated 2026 revenue forecast at approximately $49.2 billion.
The projected increase in earnings is considerably faster than the expected growth in total revenue. That implies Wedbush anticipates stronger operating leverage as AMD’s higher-value data-center products become a larger part of its business.
Operating leverage occurs when revenue grows faster than operating expenses, allowing a greater proportion of additional sales to become profit.
AI processors and complete data-center systems can support attractive revenue per deployment. However, AMD must also fund significant research, software development and customer support to compete effectively.
The 2027 forecast therefore assumes not only strong demand but also successful execution, favorable product economics and sufficient manufacturing capacity.
Microsoft and Anthropic Deals Strengthen the AI Outlook
The newly announced Microsoft and Anthropic agreements are central to Wedbush’s more optimistic projections.
Microsoft plans to use AMD technology across its Azure cloud infrastructure, creating a significant opportunity for the chipmaker to support large-scale AI inference and other demanding computing workloads.
Anthropic is also expected to deploy AMD infrastructure as it expands the computing capacity behind its artificial intelligence models. Wedbush believes these customer commitments provide greater visibility into AMD’s data-center revenue from the second half of 2026 onward.
AI inference is the process through which a trained model responds to prompts, analyzes information or generates an output. As AI services attract more users, inference can create recurring demand for processors and data-center capacity.
The commercial importance of these agreements extends beyond their immediate revenue contribution. Successful deployments at major AI and cloud companies can validate AMD’s technology and encourage additional customers to consider its platform.
The partnerships could also reduce AMD’s dependence on a limited number of previously announced AI customers.
AMD Is Becoming a Full-Stack AI Provider
Wedbush highlighted AMD’s increasingly broad position across the computing market.
The company now offers GPUs for accelerated computing, EPYC server CPUs, networking technology, software and rack-scale AI platforms. It is also expanding into client AI and physical AI applications such as robotics.
A full-stack approach is important because modern AI data centers require more than a powerful accelerator.
Processors must communicate through high-speed networking, while CPUs coordinate workloads and software enables developers to operate the hardware efficiently. Customers may prefer integrated platforms that reduce the complexity of combining products from multiple suppliers.
AMD’s strategy therefore places it in competition with Nvidia at the system level rather than only in the individual GPU market.
This broader platform could allow AMD to capture more revenue from each deployment. It also increases the execution challenge because every hardware and software component must work reliably together.
Why Data Center CPUs Still Matter
Wedbush expects AMD’s data-center growth to come from both GPUs and CPUs.
AI servers use accelerators for highly parallel calculations, but they also require central processing units to manage general computing tasks, coordinate data movement and operate the surrounding system.
AMD’s established server CPU business can therefore benefit alongside its newer AI accelerator portfolio.
A customer deploying AMD GPUs may choose AMD CPUs and networking components as part of the same infrastructure architecture. This can increase the total value of each system and strengthen the relationship between AMD and its cloud customers.
The combination also differentiates AMD from companies focused on only one part of the data-center market.
For investors, revenue diversification between server CPUs and AI accelerators could reduce the company’s dependence on the success of a single product generation.
What Could Drive AMD Stock Higher?
AMD stock could receive further support if Microsoft and Anthropic begin deploying systems according to schedule and those projects generate measurable revenue during the second half of 2026.
Additional large customer announcements would strengthen the argument that AMD is emerging as a credible alternative AI platform.
Investors will also watch gross margins. Strong sales growth will create greater shareholder value if AMD can maintain favorable pricing and improve profitability as data-center revenue becomes a larger part of the business.
Software adoption represents another potential catalyst. Customers are more likely to expand their use of AMD hardware when the development tools are stable, accessible and compatible with widely used AI frameworks.
Progress across GPUs, CPUs, networking and rack-scale systems would help validate Wedbush’s view that AMD has become a comprehensive computing-solutions provider.
What Are the Main Risks for AMD Investors?
Execution remains the most important risk.
Large customer agreements may take longer than expected to reach full deployment. Delays involving manufacturing, networking, data-center construction or software optimization could push revenue into later periods.
Competition is another major consideration. AMD must compete with Nvidia’s established hardware and software ecosystem while convincing customers that an alternative platform can deliver competitive performance and reliability.
Manufacturing capacity may also limit growth. Strong customer demand creates value only when AMD can obtain enough advanced production and packaging capacity to fulfill orders.
Valuation risk should not be ignored. Wedbush’s higher $600 target and rapidly rising earnings projections create demanding expectations. AMD stock could decline when actual revenue merely meets forecasts or when deployment timelines change.
The bullish outlook is supported by stronger customer visibility, but it still requires AMD to execute one of the most ambitious growth ramps in the semiconductor industry.
FAQ
What is Wedbush’s new AMD stock price target?
Wedbush raised its AMD price target from $450 to $600 and maintained an Outperform rating.
Why did Wedbush raise its AMD forecasts?
The firm cited AMD’s broader AI platform and new agreements involving Microsoft and Anthropic, which increased confidence in faster data-center revenue growth through 2027.
What does Wedbush expect AMD to earn in 2027?
Wedbush increased its 2027 earnings-per-share estimate to $14.74 from $12.33.
What is the new AMD revenue forecast for 2027?
Wedbush raised its 2027 revenue estimate to approximately $81.2 billion from $77.9 billion.
What is the biggest risk for AMD stock?
A central risk is that customer deployments, manufacturing capacity or software development progress more slowly than expected, delaying the data-center revenue assumed in analyst forecasts.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making any investment decisions.
