An analyst is forecasting substantial growth for American semiconductor firm Advanced Micro Devices (NASDAQ: AMD) in 2025, driven by gains in key markets such as artificial intelligence (AI).
Based on this potential, Northland analyst Gus Richard has set a 2025 price target of $175 for AMD, reflecting a 40% increase from the stock’s current valuation. At the same time, the expert has maintained an ‘Outperform’ rating for the technology firm.
In an investor note on December 30, Richard projects that the chipmaker will expand its market share, especially in AI GPUs, server processors, and PC clients, as challenges in the embedded and gaming sectors ease.
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“AMD remains one of our top picks for calendar year 2025. We anticipate AMD will continue gaining market share in AI GPUs, server CPUs, and PC clients as the headwinds from embedded and gaming segments subside,” the analyst stated.
He expects the company’s AI revenue to reach $9.5 billion in 2025, up from $5.2 billion, driven by the MI325X GPU, which competes with Nvidia’s H200.
Additionally, Richards predicts server revenue will grow 10% year-over-year (YoY) to $8.5 billion in 2025, fueled by the Turin chips outperforming Intel’s Granite Rapids. For context, during the quarter ending September 2024, AMD reported $6.82 billion in revenue, a 17% YoY increase.
Richard concluded by noting that the Santa Clara-based entity’s product roadmap, competitive positioning, and market dynamics offer significant upside potential in 2025.
More upside outlook for AMD stock price
On December 24, American institutional brokerage firm Rosenblatt shared a similarly bullish outlook. Steve Frankel maintained a ‘Buy’ rating on Advanced Micro Devices, naming the chipmaker a top investment pick for the first half of 2025, and set a one-year price target of $250 per share—significantly higher than Northland’s target.
Frankel highlighted the technology giant’s growth in CPUs and GPUs, particularly the strong performance of its Epyc CPUs and the upcoming M1350 and M1400 GPUs, as key drivers for the company.
The difference in price targets reflects varying assumptions where Northland anticipates steady growth in the AI and server markets, while Rosenblatt expects faster GPU adoption and stronger-than-expected performance from the upcoming products.
The general sentiment around AMD heading into the new year remains bullish as the company aims to expand its market share, which Nvidia (NASDAQ: NVDA) currently dominates.
This potential is supported by a consensus of 31 Wall Street analysts over at TipRanks, who expect the AMD share price to surge 47% in the next 12 months, reaching $184.
AMD stock price analysis
At the close of the last trading session, AMD stock was valued at $125.19. It ended the day with modest gains of 0.10%, extending weekly growth of over 6%. Despite operating in the booming AI market, AMD’s stock remains red across 2024, down almost 10% year-to-date.
In pre-market trading on December 30, the equity was down 1%, trading at $123.98.
In summary, Advanced Micro Devices faces several challenges, including intense competition from Nvidia and concerns that the AI market may have peaked, potentially dampening long-term growth.
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