DA Davidson announced an upgrade of Advanced Micro Devices to Buy from Neutral and increased its price target to $375 from $220, pointing to what the firm described as "a structural increase in CPU demand." The analyst note framed AMD's positioning as benefiting from improved clarity on the company's participation in an accelerating data center buildout.
The firm said it now anticipates "meaningful upside to AMD’s estimates, starting with the March quarter," ahead of the chipmaker’s scheduled earnings report on May 5. That expectation underpins the move to a more positive rating and the sizable bump in the target price.
DA Davidson highlighted stronger-than-expected results at Intel as a corroborating data point that the CPU market is reaccelerating. The note states that "Intel’s results indicate that [it] is already translating to very significant upside," and it notes that Intel executives see "double-digit industry growth through 2027." Those outcomes were presented by the firm as evidence that demand dynamics for server processors are shifting.
The analyst framed the change in workload mix as pivotal. As agentic AI use cases grow, DA Davidson argued the CPU is "reinserting itself as an indispensable foundation of the AI era," with computing requirements migrating beyond a pure GPU focus. The firm cited Intel’s assessment that the GPU-to-CPU ratio, which had been roughly 8-to-1 in pretraining phases, is moving "closer to parity for agentic workloads."
Drawing from those observations, DA Davidson characterized Intel’s performance as a precursor to a significant expansion for AMD’s CPU franchise. The firm asserted that the transition toward agentic AI workloads is producing what it called unprecedented demand for server CPUs, and that AMD stands to benefit materially.
On pricing and forecasts, the firm stated AMD is well-positioned to raise prices across its portfolio because demand is likely to outpace supply. Reflecting the updated view, analysts lifted their 2026 revenue estimate by $2 billion and increased gross profit expectations by $1.5 billion, saying recent data makes AMD’s long-term targets "much more doable."
The upgrade and revised estimates come as the market watches how evolving AI workloads will reshape CPU and GPU purchasing patterns within data centers, and as investors await AMD’s next quarterly financial release.