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Chip designer AMD scored another win today after investment research firm CFRA upgraded the firm's share rating to Strong Buy and increased the share price target to $165 from $125. The latest coverage marked the second such note for AMD after Melius Research's Ben Reitzes had upgraded the firm's rating to Buy from Hold and increased the share price target to $175 from an earlier $110. Like CFRA, Melius also posited that AMD could experience greater AI GPU demand, particularly due to strong inferencing-related demand from nation-states and hyperscalers. In its note, CRA outlines that acquisitions and new products can help AMD close the gap with NVIDIA in 2026.
AMD Shares Rise After Analyst Raises Possibility Of Narrowing The Gap With NVIDIA
CFRA analyst Angelo Zino shared several factors that influenced the firm's decision to significantly raise AMD's share price target and bump the stock to a rare Strong Buy. According to him, AMD can close the competitive gap with NVIDIA in 2026. NVIDIA's AI GPUs are the market leaders in performance and account for the vast majority of AI chip sales worldwide. AMD has always sought to take market share away from its larger rivals, and both CFRA and Melius believe that the firm can be successful in the AI GPU market next year.
A lack of AI catalysts has driven AMD's share price for most of 2025. Year-to-date, the shares have gained 14%, but ahead of the rise this week, they had lost 3.7% year-to-date due to expectations of weak PC market performance and low market share in the AI GPU market. Today's bullish coverage led the stock to close 6.8% higher.
CFRA's hypothesis of AMD closing the gap with NVIDIA is based on the former's MI400x AI accelerator chip and the firm's acquisition of ZT Systems earlier this year. Through ZT, the firm aimed to control a greater portion of the AI supply chain. CFRA believes that the ZT deal will enable AMD to enter the server rack market and expand its customer base to include heavy-hitters such as Oracle and OpenAI.
Oracle is one of the key players in the AI infrastructure industry as it enables AI software companies to use hardware and run their software models. OpenAI also sets up its own hardware clusters, and together, the pair represent a sizable portion of the AI market's demand.
Like Melius, CFRA also notes that Sovereign AI demand and a recovery in the GPU server market could fuel AMD's growth. The firm adds that AMD might be able to return to China, which could add to its revenue.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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