RBC Capital reiterated a Sector Perform rating on Advanced Micro Devices Inc., keeping a $230.00 per share price objective in place. Platform valuation data cited alongside the firm’s view places AMD's fair value at $223.41 versus a current market price of $211.84, a discrepancy that places the stock among the platform’s list of most undervalued equities.
The brokerage highlighted AMD’s recently announced multi-year data center agreement with Meta as a material strategic gain, even as it acknowledged the deal’s unconventional structure. RBC said the long-term benefits of the arrangement outweigh the dilution trade-off implied by the warrant package included in the contract.
RBC noted that the combined deals with Meta and OpenAI have the potential to position AMD as a credible supplier at the gigawatt scale, which could accelerate share gains at other enterprise customers and bolster management’s long-term growth targets. That increased conviction in management’s roadmap comes despite the firm’s uncertainty over whether the agreement will produce significant upside to consensus estimates for 2026 and 2027.
At the same time, RBC flagged a set of near-term hurdles. Component supply constraints and the challenges of executing at rack scale remain immediate concerns for the company, and the firm cited additional worries tied to the pace of volume ramps as the deployments scale.
On valuation metrics, AMD is trading at roughly 32 times price-to-earnings, which the note says represents about a 30% premium to NVIDIA. The stock’s PEG ratio stands at 0.49, a figure RBC interprets as indicating attractive value relative to expected growth. The brokerage also observed that 27 sell-side analysts have recently pushed earnings estimates higher for the upcoming period.
Market performance and recent financial momentum are notable: AMD’s shares have risen by 105.69% over the past 12 months, while trailing-12-month revenue has increased by 34.34%. Those data points were highlighted as part of a broader set of platform tips and research available for the company.
Separately, the more detailed terms of AMD’s agreement with Meta were outlined in public disclosures: the multi-year arrangement covers a 6-gigawatt compute supply and contemplates the deployment, beginning in the second half of 2026, of millions of EPYC central processing units and MI450 Helios GPU server racks. The contract also provides Meta the option to acquire up to 160 million warrants exercisable at a $600 strike price, along with a performance-based warrant allowing purchase of shares at a $0.01 strike.
Following the Meta announcement, several investment banks reiterated positive ratings on AMD. Piper Sandler and Jefferies both maintained bullish stances and set $300 price targets, emphasizing the promise of AMD’s Instinct GPU and EPYC CPU product lines. Rosenblatt interpreted the broadened partnership as evidence that AMD’s architecture can scale into high-volume production.
Not all analysts were uniformly enthusiastic. Mizuho expressed skepticism about the sustainability of the recent share rally, noting concerns around the timing of the deal and possible short-term stock volatility. Jordan Klein at Mizuho specifically pointed to the agreement’s scale while cautioning that timing could produce near-term fluctuations in the stock.
The collection of viewpoints underscores a central tension: strategic validation from large AI and hyperscale partnerships versus tangible near-term execution and supply-side challenges. Investors and market participants will be watching the cadence of deployments and how AMD manages rack-scale rollouts and component availability as the company moves toward the targeted second-half-2026 deployment window.
What to watch next
- Progress on component supply and rack-scale deployment execution;
- How the Meta and OpenAI agreements translate into share gains at other customers;
- Updates to 2026-2027 consensus estimates as visibility improves on contract ramp timing.