AMD has already had one of the best years of any stock in the market. Up more than 170% year-to-date. A market cap pushing toward $1 trillion. A server CPU business that’s been quietly taking share from Intel while the GPU story was getting all the headlines. Wells Fargo analyst Aaron Rakers raised his price target to $615 from $505 at the end of June after AMD’s EPYC Venice processors began ramping ahead of any prior generation.
Then on July 22, AMD confirmed a deal with Anthropic worth up to $5 billion. And Rakers put out another note saying the Anthropic deal gave him “further confidence” in estimates that are already above Wall Street consensus. The $615 target stays. The conviction behind it just got stronger.
Wells Fargo holds $615 AMD price target after Anthropic deal
The Anthropic deal was widely expected by investors. AMD had already announced similar arrangements with Meta and OpenAI, each committing to 6 gigawatts of AMD-based infrastructure, with 1GW initial deployments from both expected in the second half of 2026.
Anthropic’s deal adds up to 2GW of Instinct MI455X GPUs and Helios rack-scale systems, with the first gigawatt of compute beginning deployment in the first half of 2027. AMD’s equity investment of up to $5 billion in Anthropic is milestone-contingent, meaning AMD writes the check as Anthropic hits agreed deployment targets.
More Wall Street:
- Wall Street sends strong 4-word verdict on the stock market
- Wall Street’s $200 billion IPO wave threatens sell-off
- Wall Street flees software plays for triple-digit chipmaker boom
“While an Anthropic deal was widely anticipated, we view this as incrementally positive following this week’s Microsoft announcement,” Rakers wrote in the note,according to TipRanks. “We have ‘further confidence’ in our above-consensus AMD data center GPU revenue estimate at $40.6B in 2027. We think this will easily push buy-side expectations to greater than $50B.”
AMD shares rose roughly 2% on July 22 in midday trading. The stock has been one of the strongest performers in semiconductors all year. Rakers ranks 8th out of more than 12,000 Wall Street analysts tracked by TipRanks, with a 73% success rate and an average return of 59.4%.
Why Wells Fargo sees AMD GPU revenue doubling Wall Street’s expectations
Rakers’ $40.6 billion data center GPU revenue estimate for 2027 isn’t just above consensus. It’s substantially above it. His 2027 EPS estimate of $13.40 runs roughly 3% ahead of the Street. His 2028 estimate of $18.75 is about 8% above consensus. The $615 price target is built on a 33 times earnings multiple applied to that 2028 number.
The GPU numbers are what make the model striking. Rakers projects GPU revenue of $15.6 billion in 2026, then a near-tripling to $40.6 billion in 2027, and nearly $63 billion by 2028. That trajectory reflects his view that AMD is moving from training into inference, where its EPYC CPUs and Instinct GPUs create genuine competitive leverage against Nvidia.
The AMD-Anthropic deal includes a multi-year engineering collaboration. Anthropic will use Claude to optimize workloads on AMD’s ROCm software stack and Instinct GPUs. That’s the piece that matters beyond the headline number.
AMD’s historical weakness against Nvidia has been software, not hardware. A deep technical partnership with one of the world’s leading AI labs is a direct attempt to close that gap, as TheStreet reported.
Justin/Getty Images
The AMD server CPU story Wall Street keeps underestimating
The June 30 price target raise was actually built primarily on the server CPU story, not GPUs. Rakers raised his server CPU revenue estimates to $16 billion for 2026, $20.5 billion for 2027, and $25 billion for 2028. The 2026 figure represents 68% year-over-year growth. He left his GPU estimates unchanged at that point.
The driver is AMD’s sixth-generation EPYC Venice processor, built on 2nm architecture, which began production ramping in late May 2026 with volume shipments expected through the second half of the year. More customers are validating and ramping Venice than any prior EPYC generation, according to Invezz.
Agentic AI is driving a lot of that. As AI inference workloads scale across data centers, the CPU sitting alongside the GPU becomes a more meaningful part of the total system cost and performance equation.
AMD closed June at $580.91, hitting a new 52-week high of $584. The stock is up more than 170% year-to-date. That kind of run typically makes analysts more cautious about raising targets. Rakers isn’t cautious. He thinks the earnings growth ahead is large enough to justify the valuation even after the run.
What AMD’s Microsoft and Anthropic deals say about its fight with Nvidia
AMD now has announced AI compute commitments totaling roughly 14 gigawatts across Anthropic, Meta, and OpenAI. Microsoft announced plans to expand its Azure cloud with AMD technology earlier in the same week as the Anthropic deal.
That sequence isn’t coincidental. AMD has been systematically building relationships with the hyperscalers and frontier AI labs that will determine which GPU platforms get scaled over the next three to five years.
Nvidia’s real moat isn’t the chips. It’s CUDA, the software layer that makes its GPUs easier to build on. AMD has ROCm, which works, but it hasn’t had the customer pull to make developers switch.
Getting Anthropic to commit to a multi-year engineering project specifically around optimizing Claude on AMD hardware is a different kind of win than a purchasing agreement. Customers buy things. Engineering partners build things together. That’s the gap AMD is trying to close.
Barclays analyst Tom O’Malley called the absence of equity warrants in the Anthropic deal notable, describing it as evidence of “which direction the puck is moving in a supply-constrained world.” AMD’s prior deals with Meta and OpenAI included equity warrants. Anthropic didn’t ask for them.
That’s the market telling you something about AMD’s negotiating position right now, and it’s the kind of signal Rakers is factoring into a $615 target that still implies roughly 12% upside from where the stock was trading on July 22.
