AMD is strengthening its position as a de facto merchant alternative to Nvidia in the expanding AI compute market, building on a foundation of high-performance computing, graphics solutions for data centers, gaming, and embedded systems.

Joshua Buchalter of Cowen reiterates an extremely optimistic view, maintaining AMD as his top pick after meetings with CEO Lisa Su.

Management expressed confidence in meeting supply demands through strong supplier ties, notably with TSMC, and cited a $10 billion investment to secure wafer capacity and support data center opportunities.

TD Cowen raised AMD’s price target to $600 and kept a Buy rating after a June 1, 2026 management meeting.

Buchalter lifted AMD’s target to $600, signaling about 16% upside, with broad bullishness from other analysts supporting a Strong Buy, though the average target around $477 suggests potential downside over the next year.

While recognizing AMD’s investment potential, TD Cowen notes some AI stocks may offer greater upside and lower risk, pointing readers to further insights on undervalued AI opportunities.

Analysts spotlight AMD’s forward roadmap, growing software ecosystem, and capacity to compete for AI compute workloads, reinforcing its role in AI and server CPU markets as a potential alternative to NVIDIA.

Market dynamics like supply chain constraints and a recent rapid stock run are shaping price targets, though the overarching optimistic sentiment remains intact.

AMD’s AI accelerator momentum is highlighted, with the Instinct lineup gaining traction and collaboration with eight of the top ten AI firms; management outlined a Q3 MI450 launch and next-gen Helios platform, with ramp through Q4 into Q1 2027.

TD Cowen emphasizes meaningful progress over recent months, with AI productivity enabling enterprises to deploy substantial AI-related capital.

The firm argues AMD has doubled its total addressable market expectations, with a $120 billion TAM potentially conservative amid ongoing demand for efficient, high-performance CPUs for agentic AI across varied workloads.

AMD reiterated its strategy to expand TAM to about $120 billion, driven by agentic AI demand and ongoing gains against x86 and Arm rivals, while continuing optimization for inference workloads.