AMD shares climbed more than 5% in trading on Monday after Oppenheimer upgraded the chipmaker, citing strong data centre performance and accelerating demand for artificial intelligence processors.

The brokerage raised its rating on Advanced Micro Devices (NASDAQ: AMD) to Outperform from Perform and assigned a price target of $600.

The new target implies an upside of more than 33% from the stock’s closing price on Friday.

The stock is likely to have also received some boost from Nvidia’s probe into CEO Jensen Huang’s relationship with a businesswoman whom intelligence agencies have reportedly identified as a Chinese spy.

Nvidia shares fell nearly 7% in trading on Monday, adding to the relative appeal of its closest GPU rival.

Oppenheimer sees data centre growth accelerating

According to Investing.com, Oppenheimer raised its estimates for AMD after reviewing the company’s latest earnings call and holding discussions with CFO Jean Hu and investor relations vice-president Matt Ramsay.

The brokerage said EPYC processors and initial shipments of the MI455 and Helios platforms helped drive approximately double-digit data centre growth in the third quarter.

It expects the segment to expand significantly into 2027, with sales of data centre GPUs eventually overtaking revenue from EPYC server CPUs.

Oppenheimer models approximately 3 gigawatts of GPU deployments in 2027 and 4 gigawatts in 2028.

It projects data centre revenue to increase 135% next year and account for 85% of AMD’s total sales.

The firm also expects OpenAI and Meta to support demand through the first quarter, with Anthropic ramping up deployments towards the end of the period.

Demand for computing infrastructure remains strong.

The five largest cloud service providers are expected to spend approximately $1.3 trillion on capital expenditure in 2027, compared with $800 billion this year.

Supply constraints remain a challenge

AMD’s recent results have underscored the strength of its business momentum.

Fiscal third-quarter revenue rose 45% year over year to a record $13.4 billion, while adjusted earnings per share increased 74% to $2.09.

Data centre revenue nearly doubled to $8.5 billion, up 97%, supported by EPYC processors and the launch of Instinct MI450 Series GPUs.

The company expects fourth-quarter revenue of approximately $17 billion, implying growth of 66% at the midpoint of its guidance.

Chief executive Lisa Su said AMD expects company-wide revenue growth to exceed 80% in 2027.

Server CPU revenue is projected to nearly double, while data centre AI revenue is expected to grow considerably faster.

Su also said AI revenue from data centres should surpass server CPU revenue in the fourth quarter of 2026.

However, the company faces a supply challenge as demand continues to exceed available capacity.

AMD is working with suppliers to expand production as it prepares for wider Helios deployments.

The company has also committed to an annual product cadence, with MI500 expected in 2027 and MI600 in 2028, as it seeks to maintain its competitiveness in the rapidly expanding AI chip market.

Analyst upgrades and sharp moves like this often prompt traders to reassess their positions on trading platforms.

AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.

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