Advanced Micro Devices, Inc. (NASDAQ:AMD) may have just landed one of Wall Street’s boldest new price targets, but BNP Paribas says investors shouldn’t mistake it for a bet on the chipmaker’s next earnings report.
In fact, the firm believes the biggest AI demand catalyst is still at least a quarter away. Yet it raised AMD’s price target to $600 from $460, arguing the market is becoming willing to pay more for companies positioned to benefit from the next phase of the AI infrastructure buildout.
Patience Before The Next AI Wave
BNP Paribas opened its second-quarter semiconductor earnings preview with an unusual observation: a recent sell-off across AI names has actually reduced the risk of a broader “sell-the-news” reaction this earnings season.
The firm expects relatively few surprises from the AI supply chain over the coming weeks, noting that the compute-led demand cycle tied to next-generation platforms—including Nvidia Corp‘s (NASDAQ:NVDA) Vera Rubin, AMD’s MI450, Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) Google’s TPU8, Amazon.com, Inc‘s (NASDAQ:AMZN) Trainium 3 and next-generation server CPUs—is unlikely to shift into high gear until late in the third quarter.
In other words, Wall Street may need to be patient before the next major AI spending wave begins.
Why AMD’s Target Went Higher
That makes BNP Paribas’ decision to raise AMD’s price target even more notable.
The brokerage didn’t point to an imminent earnings inflection. Instead, it cited higher valuation multiples, suggesting investors are placing a greater premium on companies expected to benefit from the next leg of AI infrastructure spending.
The distinction matters.
Raising earnings estimates implies expectations for stronger near-term financial performance. Raising the multiple investors are willing to pay reflects growing confidence in the durability of a company’s long-term growth story.
For BNP Paribas, AMD appears to be benefiting from the latter.
The AI Market Is Already Looking Ahead
The firm remains bullish on the semiconductor sector through 2027, even as it expects a relatively quiet earnings season.
Rather than chasing the first wave of AI spending centered on GPUs, BNP Paribas believes the next phase will broaden across custom processors, Agentic AI CPUs, networking switch ASICs, high-speed optical transceivers and memory.
Its highest-conviction ideas into the second half of the year include Credo Technology Group Holding Ltd (NASDAQ:CRDO), Fabrinet (NYSE:FN), Arista Networks, Inc(NYSE:ANET), Seagate Technology Holdings PLC (NASDAQ:STX) and Astera Labs, Inc. (NASDAQ:ALAB) reflecting a growing belief that AI’s next winners could extend well beyond the companies building the processors themselves.
For investors, AMD’s new $600 price target may ultimately be less about what the company reports over the next few weeks and more about how Wall Street is beginning to value the next chapter of the AI investment cycle.
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