UBS raises AMD price target to $730 on higher server CPU margins

Author: Peace Longe Read Time: 7 minutes

• AMD: -5.17%
• UBS: +1.55%

Wall Street usually takes a few days to digest a product event. However, UBS took less than one.

Advanced Micro Devices (AMD) concluded its Advancing AI 2026 keynote in San Francisco on July 23. By the following morning, UBS analyst Timothy Arcuri had already raised his price target on the stock to $730 from $700, maintaining a buy rating.

The speed of his response says something. The event gave analysts enough hard information to rebuild their models on the spot.

AMD shares traded near $532 on Friday, July 24, up about 3.2% over five days and up roughly 138% year to date. The stock carries a market value of about $867 billion and a price-to-earnings ratio above 170, which means the bar for justifying any target is high.

Why UBS Moved Its AMD Price Target Within a Day of AI Day

Arcuri did not raise his target because AMD showed a faster GPU. He raised it because AMD gave him a bigger number for the server processor business, and that business carries better margins than anything else the company sells.

UBS now believes AMD's server CPU gross margin runs roughly 1,000 basis points, or 10 percentage points, above the company's corporate average.

That margin figure is the whole argument. If the highest-margin product line is also the fastest-growing one, every extra dollar of server CPU revenue lifts company-wide profitability, rather than just company-wide sales.

Arcuri told clients this could create a margin cushion that lets AMD price its 2027 MI500 accelerator aggressively and take more GPU share without wrecking profits, TipRanks reported.

AMD CEO Lisa Su used the Advancing AI 2026 keynote to raise the company's server CPU market forecast to $220 billion by 2030. — SOPA Images / Getty Images

What UBS Now Expects AMD to Earn in 2027 and 2028

The revised model runs well past next year, which is unusual for a note written overnight.

UBS projects AMD server CPU revenue of approximately $35 billion in calendar 2027, rising to roughly $60 billion in calendar 2028.

For context, according to AMD's earnings release, the entire company's revenue in the first quarter of 2026 was $10.3 billion.

UBS Earnings Per Share Estimates for AMD

• 2027: Approximately $19 per share, roughly in line with the Street
• 2028: About $27.57 per share, with Arcuri suggesting the figure could approach $30
• 2027 Data Center GPU Revenue: Approximately $44 billion

The 2028 estimate carries almost all the weight in this target increase, since UBS is roughly in line with Wall Street's consensus on 2027 but well above it on 2028.

The AI Day Disclosures That Changed Analyst Models

AMD did not just show slides. It moved several timelines forward and put a much larger number on the market it plans to serve.

CEO Lisa Su told the audience during AMD's press release that the server CPU market will grow to about $220 billion by 2030, up from roughly $25 billion today.

AMD already holds 46% of server CPU revenue share.

The company also confirmed its Helios rack-scale system has entered full production, with shipments starting at the end of the third quarter and a broader ramp in the fourth.

The Customer Commitments Behind the Forecast

Forecasts are cheap. Signed capacity is not.

• OpenAI: Up to six gigawatts of AMD GPUs, starting with MI450 deployments in the second half of 2026
• Meta: A separate six-gigawatt agreement on a similar timeline
• Anthropic: Up to two gigawatts of Helios capacity, with the first gigawatt beginning