Citi upgrades AMD to Buy, cites Meta GPU pact

Citi upgraded Advanced Micro Devices to Buy from Neutral and raised its price target to $575 from $460. The upgrade, published on Friday by analyst Atif Malik, came as the firm highlighted a multiyear agreement with Meta to deploy up to six gigawatts of AMD Instinct GPUs.

Citi flagged the Meta deal as a major potential revenue source and estimated roughly $15 billion in revenue for each gigawatt deployed under the six-gigawatt agreement. AMD shares gained about 5.9% on the upgrade.

Malik wrote that investors still view AMD mainly as a CPU maker but that the company could become a credible second source in the GPU market and capture a large share of Meta’s business. The analyst noted a custom MI1450 GPU being developed with Meta that could lower total cost of ownership for Meta’s AI infrastructure.

Citi raised its forecasts for AMD’s AI-related revenue, projecting about $33 billion in 2027 and $50.8 billion in 2028. Malik also said investors appear to be pricing in roughly a 60% probability that AMD will exceed $50 billion in GPU revenue by 2028.

The firm kept a positive view of AMD’s CPU business and increased its estimate of the total addressable CPU market to $137 billion by 2030. Malik expects AMD’s upcoming Venice server processors to outpace Intel’s Diamond Rapids chips while noting continued demand for Intel products.

Industry context: Nvidia remains the dominant supplier of training GPUs, but AMD has been gaining traction as an alternative. Large technology companies are also designing custom AI accelerators, and hyperscale customers seeking options beyond a single supplier could affect demand for AMD’s GPUs.

Citi’s upgrade comes amid broader analyst interest in chipmakers tied to AI spending; other firms have recently moved to raise ratings on key semiconductor names. In a research note, Malik wrote, “We now see AMD emerging as a legitimate second source in the GPU market with company poised to win lion’s share at Meta. We believe Meta will be a significantly larger customer of AMD’s AI products, especially GPUs, than Wall Street is expecting.”