AMD's Price Targets Rocket to $725 — But the Chips Ship in 2027

Wall Street analysts are racing to slap higher price targets on AMD just 24 hours after its blockbuster Anthropic pact, with one firm now calling for $725 — even though the chips at the center of the deal don't ship until 2027.

What Happened

As I broke down in AMD Jumps 8% as It Bets $5B on Anthropic to Take On Nvidia, AMD and Anthropic announced on July 22 that AMD will invest up to $5 billion in the AI lab as part of a broader supply agreement. Anthropic will deploy up to 2 gigawatts of AMD's Instinct MI450-series GPUs, housed in AMD's "Helios" rack-scale systems alongside EPYC "Venice" CPUs, Pensando networking gear, and the ROCm software stack. The first gigawatt of that capacity is scheduled to go live in the first half of 2027, with Anthropic splitting its buildout between chips it owns outright and capacity rented through cloud providers and neoclouds, according to Bloomberg's report citing the Wall Street Journal. The deal also includes an engineering collaboration aimed at optimizing Anthropic's models for Instinct hardware and speeding up ROCm's development.

semiconductor chip investment deal

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Why It Matters: The Analyst Stampede

The headline stock move — AMD shares rising 8.11% on the day the deal broke — is already old news. What's happening now is arguably more interesting: a wave of price-target hikes that has pushed Wall Street's average view of AMD sharply higher in a matter of days. KeyBanc lifted its target to $725, TD Cowen moved to $675, and both Jeff Pu and Goldman Sachs raised their targets to $640, with Goldman's move coming from $450 just weeks earlier, according to TipRanks. Stifel Nicolaus set $635 with a buy rating, and Wells Fargo assigned an Overweight rating with a $615 target. AMD now carries an 82.4% buy rating among covering analysts.

Yet the stock's actual price action has been choppier than the target hikes suggest. Pre-market trading on the news spiked before quickly giving back those gains, with shares trading down roughly 3% at one point as a broader tech slump weighed on chipmakers, per Yahoo Finance. That gap between a euphoric analyst chorus and a more skeptical intraday tape is the real story here: the market is being asked to price in 2027 revenue today.

stock analyst price target chart

Photo by Pexels on Pixabay

Who's Affected

Nvidia remains the most obvious counterparty to watch. Nvidia still controls more than 95% of the data center GPU market versus AMD's roughly 4.5% share, so even a successful 2-gigawatt Anthropic buildout would only dent, not threaten, Nvidia's dominance in the near term. But the deal adds Anthropic to a growing list of AMD AI customers that already includes OpenAI and Meta Platforms, giving AMD a credible multi-customer story for the first time in years — which is precisely what's driving the target hikes.

The deal also puts ROCm, AMD's software stack, under a brighter spotlight. Nvidia's CUDA ecosystem has long been considered its deepest moat, and the fact that Anthropic is committing engineering resources to optimize its models for ROCm is a signal that at least one frontier AI lab believes the software gap is closable. Supply-chain players tied to AMD's Helios racks — including networking and CPU components via EPYC "Venice" — stand to see incremental order flow as deployment ramps toward 2027.

What to Watch Next

  • Execution timing: The first gigawatt of MI450 capacity isn't due online until the first half of 2027, meaning revenue recognition is still roughly 18 months out — a long runway for a stock now trading on a re-rated multiple.
  • AMD's Advancing AI event: Analysts have flagged AMD's upcoming Advancing AI 2026 event as a potential catalyst where the company could detail more specifics on the Anthropic ramp and ROCm progress.
  • Whether the "spike then fade" pattern repeats: The initial pre-market reaction — a jump followed by a pullback — suggests some investors are questioning whether the good news is now fully priced in after a run of price-target upgrades.
  • Nvidia's response: Watch for any commentary from Nvidia on customer diversification trends, or competing announcements aimed at reinforcing its CUDA and supply lock-in advantages.

This is not financial advice — always do your own research before making investment decisions.

The Anthropic deal is a genuine strategic win for AMD — a second major AI lab willing to bet real capacity on Instinct chips and ROCm software. But the gap between a chorus of $600-plus price targets and a stock that briefly traded lower on the news is a reminder that a 2027 delivery date is still a long way from 2026 earnings. The deal changes AMD's narrative; it hasn't yet changed its numbers.

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