DA Davidson has opened coverage on Advanced Micro Devices (NASDAQ:AMD) with a Neutral recommendation and a $220.00 price objective, a level the firm says is closely aligned with InvestingPro's Fair Value assessment. At the time of the report, AMD was trading at $205.96, and the range of analyst price targets spans from $210 to $365.
The research note portrays AMD as a strong contender in consumer and server central processing unit markets, but describes the company as a "marginal AI accelerator player" that is working to close gaps with peers. DA Davidson underscores that this view applies even as AMD reported significant top-line expansion, with total revenue of $34.64 billion and a 34.34% increase over the prior twelve months.
On the machine-learning hardware front, DA Davidson highlights the contrast between specification sheets and operational performance. The firm observed that AMD's Instinct GPUs "have impressive specifications on paper," yet customers are prioritizing demonstrated, real-world outcomes over theoretical metrics when making purchasing decisions.
Central to DA Davidson's assessment is a concern about large-scale AI deployment dynamics. The firm states that "running frontier workloads across tens of thousands of GPUs is an interconnect and systems-integration problem that NVIDIA has a hold on and AMD doesn’t have a serious answer for." That conclusion informs the analyst view that AMD's hardware achieves lower real-world model FLOPs utilization at scale than raw specifications might imply, which in turn makes the "effective cost per useful FLOP worse than advertised."
Alongside DA Davidson's coverage initiation, the company announced a marketing leadership change with Ariel Kelman named as chief marketing officer. Kelman will oversee global marketing initiatives and report to Senior Vice President Ruth Cotter.
Analyst reactions to AMD's outlook remain varied. UBS trimmed its price target to $310 from $330, attributing the cut to a $1 billion reduction in the firm's 2026 gaming business forecast, while maintaining a Buy rating. Benchmark reiterated a Buy and set a $325 price target, highlighting AMD's expanding role in artificial intelligence, especially within AI Data Centers. TD Cowen also reaffirmed a Buy rating with a $290 price target, noting optimism about AMD's future prospects and citing the upcoming MI450/Helios product launch despite describing recent results as a "noisy quarter." Meanwhile, RBC Capital kept a Sector Perform rating with a $230 target and said that AMD's most recent quarterly results were in line with expectations, helped by an unexpected contribution from China AI revenue.
These developments combine a strategic executive appointment with a mix of analyst viewpoints on AMD's market positioning, product momentum and near-term outlook. The range of price targets and ratings highlights divergent assessments among brokerages even as the company posts robust revenue growth and maintains leadership in key CPU segments.
Summary of market context and analyst positioning:
- DA Davidson: Initiated coverage, Neutral, $220 price target, describes AMD as a "marginal AI accelerator player."
- UBS: Buy maintained, PT lowered to $310 from $330 due to a $1 billion reduction in 2026 gaming projections.
- Benchmark: Buy reaffirmed, $325 price target, emphasizes AI Data Center role.
- TD Cowen: Buy reaffirmed, $290 price target; optimistic about MI450/Helios product launch.
- RBC Capital: Sector Perform maintained, $230 price target; quarterly results in line with expectations, supported by unexpected China AI revenue.