Wells Fargo walked away from Advanced Micro Devices ‘ latest analyst day feeling even more bullish on the stock. The bank reiterated its overweight rating and hiked its price target to $345 from $300, implying an upside of more than 45%. Shares were up more than 5% after CEO Lisa Su predicted compound annual revenue growth of about 35% over the next three-to-five years. She cited an “insatiable” demand for artificial intelligence chips as a catalyst. AMD YTD mountain AMD YTD chart The company’s AI data center business is expected to grow at around 80% per year in the same time frame, and is on track to hit billions of dollars of sales by 2027, she said. Su also expects that AMD could capture “double-digit” share in the data center AI chip market in the next three to five years. By 2030, the company expects AI data center revenue to reach $1 trillion per year. Wells Fargo analyst Aaron Rakers maintained his bullish stance in the wake of Su’s forecasts. “We are positive on AMD’s ability to continue gaining share in the server and PC CPU markets, increasing traction in datacenter GPUs, positive / accelerating incremental operating leverage, and ultimately, earnings power in excess of +$10/share by 2027,” he wrote. “AMD has outlined a compelling, stronger-than-expected financial model framework at its Analyst Day — outlining a path to > $20/sh. EPS by 2030, underpinned by a > 35% rev. CAGR% w/ Data Center growing at a > 60% CAGR.” To be sure, there are some risks to Wells’ bullish outlook, including “technology roadmap execution, key executive risks, increasing / broadening competitive landscape, increasing investor upside expectations / sentiment, and improved execution by the company’s main competitors.”
