Wall Street Is Rushing To Buy AMD — Is This AI Stock A Huge Bubble?

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(SeaPRwire) –   By: James Vance

Wall Street can’t get enough of AMD right now. Every major bank is upgrading their price targets. The crowd is buying the AI growth story hard. Valuation red flags are flying right in plain sight. Insiders have dumped nine-figure sums of shares. The market is split straight down the middle on this one. Investors are terrified they’ll either miss the rally or bag a bubble.

AMD posted Q1 revenue of $10.25 billion. That beat analyst estimates of $9.89 billion. EPS hit $1.37, topping the consensus $1.29. Q2 revenue guidance came in at $11.2 billion, beating market predictions. Benchmark raised its price target to $485 from $325, holding a Buy rating. Goldman Sachs upgraded AMD to Buy, lifting its target to $450 from $240. Bernstein set a $525 Outperform target, up from $265. AMD currently trades at $493.16 per share. Its P/E ratio sits at 161.69x, far above its five-year median of 92.64x. GuruFocus pegs its intrinsic value at $231.63, meaning it is 112.9% overvalued. Insiders sold $122.1 million worth of stock in the past three months.

The bull case checks out on paper. AMD is gaining traction in both AI CPUs and GPUs. It has locked in multi-year deployments through 2027 with Meta and OpenAI. It won better TSMC wafer allocation to meet rising demand. It doubled its projected server CPU CAGR and expanded its TAM. The current price already bakes in every bit of this good news. Any miss in Q2 results will trigger a sharp correction.

Author bio: James Vance, Senior Columnist covering semiconductor and AI markets for a top international tech weekly.