AMD's stock price soared 10%, with the new generation of AI chips receiving positive market outlook, and GPU business expected to rebound in the fourth quarter

AMD's stock price rose more than 10% on Monday after Piper Sandler analysts raised their target price, expressing optimism about AMD's latest product launch.

In April this year, AMD stated that due to new licensing regulations for semiconductor exports from the United States, the company could incur costs of up to $800 million. Piper Sandler analysts pointed out that these costs will impact gross margins in the second and third quarters, but the company is expected to rebound quickly thereafter.

The analysts wrote:

"Although AMD is currently experiencing short-term adjustments and some adverse events, the company seems to be well-prepared for growth starting in the second half of 2025 (especially in the September quarter). We expect the company to achieve significant breakthroughs starting in the December quarter of 2025."

At the "Advancing AI" conference held in San Jose last week, AMD launched its next-generation Instinct MI350 series chips, aiming to compete with market leader NVIDIA. The company also previewed the Helios rack system, set to be released in 2026, which will feature the Instinct MI400 series chips and can accommodate up to 72 chips in a single server.

Media analysis suggests that this system is expected to play a significant role among AI customers such as cloud computing companies and large language model developers.

The analysts wrote in their report:

"Overall, we are excited about the products AMD launched this week, especially the Helios rack system, which we believe is crucial for the growth of AMD Instinct."

Piper Sandler raised AMD's target price from $125 to $140 and maintained an "overweight" rating on the stock.

On Monday, AMD's stock price briefly surpassed $128, with an increase of over 10%, making it the largest gainer in the S&P 500 index and reaching a new high since January 6, which means Piper Sandler's target price represents about a 10% premium over the current price.

Over the past year, AMD's stock price has been highly volatile. Since the 52-week closing high of $183.96 on July 10, 2024, the stock has fallen by 32%; however, since the 52-week closing low of $78.21 on April 8, 2025, the stock has risen by 61%.

Bank of America: Amazon May Be the Next Major Partner

AMD CEO Lisa Su showcased these new products at the launch event in San Jose, California. During last week's event, AMD also emphasized its collaborations with companies such as OpenAI, Meta, Oracle, and Microsoft, the developers of ChatGPT. OpenAI CEO Sam Altman also appeared at the launch, stating that these products sound "absolutely insane." Su Zifeng stated at the time:

"When Helios is released in 2026, we believe it will set a new standard for large-scale AI applications."

Analysts at Bank of America believe that AMD may have a significant partnership yet to be announced—Amazon.

Bank of America pointed out that Amazon's cloud computing division AWS is one of the "main sponsors" of this event. However, AWS typically announces new partnerships at its own events, so there is a high likelihood of another announcement in the future.

After the event, Bank of America maintained its "Buy" rating on AMD and set a target price of $130. In contrast, according to data from Visible Alpha, the consensus target price among market analysts is approximately $124.

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