Citi analyst Atif Malik has upgraded his investment rating for AMD from Neutral to Buy. He raised the target price significantly, moving it from $460 per share to $575 per share. This shift reflects a belief that Wall Street currently undervalues the company's graphics processing unit business.
Analyst cites Meta partnership and undervalued graphics unit as key drivers for upgrade
The upgrade centers on AMD's expanding role in the data center market alongside its traditional CPU dominance. Malik argues that investors still view AMD primarily as a processor manufacturer rather than a full-stack silicon provider. The analyst identifies the company as the undisputed second-largest supplier in the global GPU sector.
A key driver for this valuation change is a major cooperation agreement with Meta Platforms. Meta announced in February that it would deploy up to 6 gigawatts of AI data center GPUs from AMD. The two companies are currently co-developing customized MI1450 graphics cards designed to lower the total cost of ownership for large-scale deployments.
Malik estimates that AMD can generate $15 billion in revenue for every one gigawatt of GPUs deployed under this agreement. He suggests that AMD is positioned to win most of Meta's future orders based on these technical partnerships. The report highlights the financial scale of AI infrastructure spending as a critical growth vector for the chipmaker.
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