Citi Upgrades AMD to Buy, Raises Price Target to $575
Miles Bennett
Citi upgraded AMD from Neutral to Buy and lifted its target from $460 to $575, arguing the market drastically underestimates AMD's GPU potential — not the already-priced-in CPU business.
Why is Citi turning bullish on AMD now?
Analyst Atif Malik says most investors still treat AMD as a CPU story, missing the real value in GPUs.
The current share price implies only a ~60% probability that AMD hits over $50 billion in GPU revenue by 2028. This means → the market is barely more than half-convinced AMD can deliver on GPUs.
Citi's thesis: AMD is becoming the "truly credible second source" in GPUs behind Nvidia, and the stock hasn't caught up.
How big is the Meta deal?
AMD signed a multi-year GPU supply agreement with Meta for 6 gigawatts of AI data-center capacity, plus warrants for 160 million common shares.
Citi estimates each gigawatt maps to roughly $15 billion in revenue. In plain terms = Meta alone represents a potential ~$90 billion revenue pipeline.
The first 1 GW tranche begins delivery in H2 2026 and runs into 2027. This means → this is not a long-dated aspiration — the delivery timeline is already on the calendar.
What gives AMD's custom chip the edge at Meta?
AMD and Meta co-developed a custom MI450 chip, designed to deliver lower total cost of ownership — the full-cycle expense of buying and running the hardware.
Malik expects AMD to capture the "largest share" of Meta's future GPU purchases on the back of that cost advantage.
This reflects a broader trend: hyperscalers are actively cultivating a second GPU supplier to drive down bargaining costs with Nvidia.
How much did Citi raise the GPU revenue forecasts?
Citi now projects AMD AI-segment revenue at $33 billion in 2027 (up 137% YoY) and $50.8 billion in 2028 (up 54% YoY).
In plain terms = Citi sees AMD's GPU revenue more than doubling in two years, crossing the $50 billion mark by 2028.
These numbers are the backbone of the upgrade — if GPU revenue materializes, the current price is an undervaluation.
How does the CPU base look?
Post-Computex, Malik raised his 2030 CPU total addressable market estimate from $132 billion to $137 billion.
AMD's upcoming Venice CPU spans roughly 8 to 256 cores. Malik benchmarked it against Nvidia's Vera and Intel's Diamond Rapids and concluded AMD is more competitive.
Key advantages: performance leadership, higher core counts, x86 compatibility, and a broader SKU lineup.
Two major banks upgrading back-to-back — what does that signal?
One day before Citi's call, Bank of America had already raised AMD's target from $500 to $560 and named it the top CPU pick.
BofA also lifted its 2030 server-CPU TAM estimate from $125 billion to $170 billion.
This means → the two banks don't disagree on whether AMD is strong — the real test is whether the GPU pricing thesis can be validated in actual 2027–2028 revenue. That will be the make-or-break checkpoint for the current valuation.
Content is for reference only, not financial advice.