AMD (AMD) stock, in line with my previous predictions, has risen tremendously this year amid the AI revolution. With the Street becoming excited about the company's opportunities to supply chips for quickly proliferating agentic AI applications, the shares are likely to keep climbing significantly in the short-to-medium term. And over a longer time span, the company and its shares should be big beneficiaries of the physical AI boom.
Consequently, I believe that AMD CEO Lisa Su was on target when she said recently that she expects the demand for chips to be “very high” for years.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
In light of these positive trends, AMD stock is well-positioned to climb much higher in the next year or two.
www.barchart.com AMD's Agentic AI Opportunity That's Thrilling the Street
On Oct. 6, Citi hiked its price target on AMD to $800 from $575, citing the company's ability to supply CPU chips for the rapidly expanding agentic AI space. Due to the agentic AI surge, the bank predicts that the value of the market for CPU chips will soar to $300 billion by 2030 from $29 billion in 2025. Citi, which reported that CPUs are increasingly powering many of the activities carried out by agentic AI, also believes that AMD will benefit more than any other firm from the latter trend. It kept a “Buy” rating on the name.
Also enthusiastic about AMD's opportunity in the CPU space and very bullish on its shares in general have been Japanese bank Mizuho along with investment banks Stifel and Cantor Fitzgerald. Indicating that major investors are also upbeat on the name, its shares jumped 25% in the month that ended on Oct. 6, and, as of that date, they had advanced 200% in 2026. And finally, Barchart Technical Opinion rates the shares as “a 100% Buy with a Strengthening short-term outlook.”
Physical AI Still Represents a Gigantic Opportunity for AMD
As I noted in a previous column on AMD, “In January, Su said that physical AI, including autonomous vehicles and humanoid robots, could be ‘the next big thing.’” Now, with multiple Chinese companies looking poised to sell large numbers of humanoid robots, Alphabet's (GOOG) (GOOGL) Waymo quickly expanding its footprint, and Uber (UBER) starting to carry out its plan to independently launch robotaxis in many cities, physical AI looks guaranteed to be at least one of the next big things. As a result, AMD should be able to sell a huge number of its embedded processors that, according to the chipmaker, can power “automotive, industrial, and physical AI.”
Valuation and the Bottom Line on AMD Stock
AMD stock is changing hands at a high forward price-earnings ratio of 98.6x. But given the company's massive opportunities and the Street's enthusiasm for the name, AMD nonetheless remains a good choice for growth investors at this point.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.