Wells Fargo Bets on 19% AMD Surge Driven by Datacenter GPU and Turin CPUs

Wells Fargo has bumped up the price target for Advanced Micro Devices (NASDAQ: AMD) ahead of its next earnings report, eyeing a nearly 20% upside from current levels. The firm's analyst, Aaron Rakers, reiterated his overweight rating on AMD and pushed the price target from $120 all the way up to $185. This fresh target suggests an 18.9% gain based on Tuesday's closing price.

So what's fueling this jump? Rakers is betting heavily on AMD's datacenter GPU segment, especially with the recent rollout of the MI355X chips which just started shipping last month. He forecasts strong year-over-year growth there extending into the second half of 2025, signaling solid confidence in the company's ability to keep gaining traction in this space.

The company's recent performance backs this enthusiasm: AMD's stock has zoomed over 76% in the last three months, dwarfing the S&P 500's roughly 18% gain. Over the past six months, it's climbed more than 31%, so the market's clearly been bullish going in.

Rakers also highlighted AMD's CPU roadmap, pointing toward the fifth generation of Epyc processors called Turin. He expects the company to emphasize its server CPU market share gains, fueled by the Zen 5-based Turin chips ramping up alongside ongoing adoption of Zen 4-based Genoa and Bergamo Epyc CPUs. According to the analyst, this puts AMD in a strong spot for further enterprise-driven growth thanks to "ample room" ahead with these newer chips.

AMD is scheduled to report earnings August 5th after the market closes, which should shed more light on execution and guidance. Interestingly, Rakers isn't alone in his bullish stance - out of 52 analysts in total, 37 carry strong buy or buy-equivalent ratings on AMD. Meanwhile, 15 are more cautious with hold ratings. The average price target is near $138, which actually points to more than 11% downside if you go strictly by analyst consensus.

This divergence in expectations makes the lead-up to earnings particularly interesting. Is the $185 target a stretch or a glimpse into AMD's potential to keep disrupting the datacenter and server CPU space? Time will tell.