KeyBanc reinstated its advice to buy AMD stock. Alarm over demand is no longer relevant

KeyBanc Capital Markets has returned to a positive assessment of Advanced Micro Devices shares, raising its recommendation to "buy" amid a sharp increase in demand for server chips. Analysts believe that their earlier fears about possible "failure" of sales have weakened: on the contrary, the company is close to selling off literally all of its processor stocks.

KeyBanc Capital Markets upgraded shares of chip maker Advanced Micro Devices (AMD) to Overweight ("above market"), corresponding to a buy recommendation, MarketWatch reported. In addition, KeyBanc increased the target price of the securities to $270: this implies a potential upside of 22% from the closing price of trades on January 13.

According to KeyBanc analyst John Wine, the company's shares look attractive to buy as previous concerns about a possible "failure" in demand have eased. AMD is now close to completely selling off its CPU stock amid a surge in demand from hyperscalers - large technology companies investing in building data centers. Because of this, he added, AMD is considering raising server CPU prices by 10-15% in the first quarter.

KeyBanc expects the company's server processor business to grow at least 50% in 2026 due to continued strong demand.

The upgrade comes less than a year after Wien, conversely, downgraded it to Neutral (Sector Weight). Back then, in April 2025, the analyst pointed to growing fears of a possible "failure" in demand between the Instinct MI355 line of AI gas pedals and the next generation MI455. The analyst now predicts that Advanced Micro Devices' revenue from AI solutions will reach $14-15 billion in 2026.

At the same time, Vinh expects AMD's PC chip business to look weaker than the market as memory prices continue to rise amid shortages driven by AI demand. He notes, however, that this situation forms a "favorable gross margin structure" for the company.

Shares of AMD at the auction on January 14 added about 1.4% at the moment, but then lost all the gained and began to fall by about 0.2%. After raising the target on January 13, quotes of the company rose in price by 6.4%. Since the April downgrade, the company's shares have risen 166%.

On January 13, investment bank China Renaissance began coverage of Advanced Micro Devices with a buy recommendation and $291 target price. The bank's target suggests the company's shares will grow by almost 32%.

On January 7, New Street Investment Company raised its target price on AMD shares from $300 to $354, maintaining a buy recommendation. This implies a potential upside of 60% from the closing price on January 13.

Of the 52 analysts covering the chipmaker's securities, 42 advise buying them and the remaining ten advise holding them in a portfolio.

This article was AI-translated and verified by a human editor