TD Cowen Sees AMD Hitting $600 – What The Bull Case Ignores

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(SeaPRwire) –   By: Reginald Vance

Wall Street is split wide open on AMD right now. One side calls for a $600 price target. The other panics over stretched valuations. Broadcom’s weak AI guidance dragged all chip stocks lower recently. The root tension sits in AI chip physical scaling limits. Conflicting capital flows leave investors guessing. No one can agree if the rally is justified or just hype.

AMD posted Q1 earnings of $1.37 per share. That beat consensus estimates by $0.08. Revenue hit $10.25 billion, up 37.8% year over year. That beat analyst expectations of $9.9 billion. Goldman Sachs upgraded AMD to Buy on May 6, lifting its target from $240 to $450. Sanford C. Bernstein lifted its target to $525. TD Cowen raised its target to $600 on June 1. Barclays has a $665 target, tied to rising AI CPU demand. Krane Funds boosted its Q4 stake by 72.7% to 11,306 shares. Norges Bank added a new $4.9 billion position in Q4. Institutional investors hold 71.34% of outstanding stock. AMD opened most recently at $466.38, well above its 50-day moving average of $358.36. The average consensus target sits at $419.86. Insiders sold $119.5 million of stock in the last 90 days. TSMC has warned AI chip supply will stay tight for years. AMD’s current P/E ratio sits at 152.91. Sell-side analysts project full year EPS of $6.20.

Big institutions are piling into AMD to bet on AI growth. Insiders are locking in gains after the 12-month run. Tight supply from TSMC limits near-term upside for smaller players. Only large incumbents like AMD can lock in enough wafer capacity. This rally will accelerate consolidation across the semiconductor space. The strongest players will grab nearly all AI chip margin gains.

Author bio: Reginald Vance, a venture partner specializing in semiconductor valuation and advanced materials investing.