Advanced Micro Devices (NASDAQ:AMD) standing in the AI game appears to be getting stronger by the day and last week’s OCP Conference in San Jose, CA, further strengthened its case.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
That is the opinion of BofA analyst Vivek Arya, who ranks among the top 3% of Street stock experts, following some positive announcements made at the event.
Highlights for Arya include Oracle’s plan to introduce the first publicly available MI450 Series–based clusters featuring 50,000 GPUs starting in Q3. The Helios rack was also officially unveiled, built on Meta’s Open Rack Wide (ORW) standard as an open reference design. Arya points out that ORW support positions AMD in tandem with Meta’s data center architecture, potentially creating an opportunity for “further penetration” at Meta. AMD’s rack lineup will feature MI450 Series GPUs, Venice CPUs, and Vulcano DPUs, which Arya believes represents a $15–20 billion sales opportunity per gigawatt. Additionally, AMD now plays a role across all major open-standard AI networking ecosystems – UALink for scale-up links and switches, Ultra Ethernet for scale-out switches, and ESUN for L2/L3 scale-up fabrics and switches – supporting a “vendor-agnostic” ecosystem across CPUs, accelerators, NICs, and switches.
Meanwhile, the ROCm software stack continues to show steady improvement, with the AMD ROCm PyTorch team actively working to lower the number of open ROCm-based disabled or skipped tests since June’s Advancing AI Day. And just as importantly, the Helios rack is now showcased as a fully operational system that can be viewed in person, rather than just a display featuring images of its components as was the case at the Advancing AI event.
“Overall,” the 5-star analyst said, “we now see greater visibility into the deployment and ramp outlook of MI450 Series ‘Helios’ racks launching in 2H26, supported by key industry customers such as Oracle, Meta, and OpenAI.”
Arya sees OpenAI’s first 1 GW deployment starting in 4Q26, representing approximately $17.5 billion in AMD GPU content per gigawatt, though the analyst conservatively assumes only 50% will materialize. This increases Arya’s CY26 and CY27 sales forecasts by $1.4 billion and $9.7 billion, respectively, or +4% and +21%. If full deployment of six gigawatts occurs over four years, the analyst sees CY27 EPS of $10–11 and CY30 EPS of $15–16 or more. Importantly, says Arya, his base case assuming 50% OpenAI adoption implies a 4% and 5.4% share of the AI accelerator market in CY26 and CY27, respectively, as part of an estimated $287 billion and $430 billion market – significantly higher than his previous outlook of 3–4%. At full 100% deployment, Arya thinks AMD’s share could even approach 7.5%.
With that opportunity now at play, Arya raised his price objective from $250 to $300, suggesting the stock will gain 29% in the months ahead. Arya’s rating stays a Buy. (To watch Arya’s track record, click here)
28 other analysts also take a favorable view of AMD’s prospects, and with an additional 10 Holds, the stock claims a Moderate Buy consensus rating. The forecast calls for 12-month returns of 7%, considering the average target stands at $249.92. (See AMD stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.