Something just shifted in the semiconductor market. And one analyst who had been sitting on the sidelines on AMD just made one of the most aggressive calls on the stock this year.
The trigger was not AMD’s own earnings. It was a rival’s. And what that rival revealed about the CPU market changes the AMD story in ways investors have not fully priced in yet.
What DA Davidson did
DA Davidson analyst Gil Luria upgraded AMD to Buy from Neutral and raised his price target to $375 from $220, a 70% increase in the target in a single move. The new target is based on 32 times calendar year 2027 earnings per share, according to the analyst note reviewed by TheStreet.
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Luria also raised his 2026 revenue estimate for AMD by $2 billion and his gross profit estimate by $1.5 billion, putting both materially above Wall Street consensus and AMD’s own guidance. That is not a sentiment upgrade. It is a fundamental reset of the earnings model.
AMD is due to report Q1 2026 results on May 5 after market close. Analysts project revenue of approximately $9.84 billion for the quarter, implying roughly 32% year-over-year growth, according to 24/7 Wall St.
Intel’s quarter also revealed something about AMD
The catalyst behind Luria’s upgrade is Intel’s Q1 2026 earnings report. Intel posted revenue of $13.6 billion, a full $1.4 billion above the midpoint of its own guidance, driven almost entirely by an explosive surge in server CPU demand, according to Intel’s Q1 press release.
Intel CEO Lip-Bu Tan was direct about what is driving it. “The CPU is reinserting itself as the indispensable foundation of the AI era,” he said on the earnings call. “This isn’t just our wishful thinking, it’s what we hear from our customers,” according to the Motley Fool transcript.
The reason is structural. AI workloads are evolving. The pretraining phase that drove massive GPU demand is giving way to inference, agentic AI, and multi-agent workloads. Those workloads require a fundamentally different compute mix. As Intel CFO David Zinsner explained on the call, the GPU-to-CPU ratio is shifting from roughly 8:1 for pretraining to potentially approaching parity for agentic workloads, Motley Fool noted.
That shift has enormous implications for AMD. If CPUs are becoming central to the AI era again, AMD’s server CPU business is positioned to capture a significant share of a market that was not expected to grow this fast.
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Why Luria thinks the upside belongs to AMD
Luria’s logic is straightforward. If Intel, with its dominant server CPU market share, beat estimates by $1.4 billion in a single quarter on CPU strength alone, AMD can do the same. “Even though AMD has lower CPU share, if Intel can add about $2.5 billion a year of revenue and gross profit based on the tightness in CPUs, we are comfortable with those levels for AMD,” he wrote in the note.
He also flagged AMD’s pricing power. With demand expected to outpace supply for the foreseeable future, AMD is “favorably positioned to significantly raise prices across the portfolio to support and expand margins,” Luria noted. That is a meaningful development for a company whose margin profile has been a point of investor skepticism.
Beyond CPUs, Luria acknowledged a prior mistake. “We regret not underwriting AMD’s participation in the GPU buildout upon initiation,” he wrote. He now sees AMD’s long-term guidance, including its 35% revenue CAGR target, as “much more achievable than it was just a few weeks ago,” with Meta’s 6 gigawatt AI infrastructure commitment and OpenAI’s $122 billion fundraise tipping the scale in AMD’s favor.
Key figures behind DA Davidson’s AMD upgrade:
- New price target: $375, upgraded from $220, based on 32x CY27 EPS.
- Rating change: Buy from Neutral, analyst Gil Luria, DA Davidson.
- 2026 revenue estimate raised by $2 billion, gross profit estimate raised by $1.5 billion, now above guidance and consensus.
- AMD Q1 2026 earnings scheduled for May 5 after market close, according to AMD Investor Relations.
- Analyst consensus price target on AMD: $289-$290, per 24/7 Wall St., making DA Davidson’s call among the most bullish on the Street.
- Intel Q1 2026 revenue: $13.6 billion, $1.4 billion above guidance midpoint, according to Intel’s press release.
- GPU-to-CPU ratio shifting from 8:1 for pretraining toward near parity for agentic workloads, per the Intel earnings call.
- AMD’s 35% revenue CAGR target now viewed as more achievable, Luria noted, citing Meta’s 6GW AI commitment and OpenAI’s $122 billion fundraise.
Where DA Davidson stands versus the rest of Wall Street
DA Davidson’s $375 target stands well above the Street consensus. The average price target among roughly 40 analysts covering AMD sits around $289 to $290, with 29 issuing Buy recommendations and zero Sell ratings, according to 24/7 Wall St. Even the most bullish pre-upgrade targets from firms like Wells Fargo topped out at $345.
That gap matters. It means Luria is not just moving with consensus. He is making a differentiated call based on a specific thesis: that Intel’s Q1 results are a leading indicator for AMD’s CPU business, and that the Street has not yet caught up to what that means for AMD’s 2026 and 2027 earnings power.
What investors should watch heading into May 5
AMD’s Q1 2026 earnings report is now one of the most anticipated prints in the semiconductor sector. The company guided for revenue of approximately $9.8 billion, implying 32% year-over-year growth, with a non-GAAP gross margin of around 55%, according to TipRanks.
DA Davidson expects AMD to beat those numbers. If the CPU demand surge that propelled Intel’s quarter is as structural as Luria believes, AMD’s server CPU revenue could surprise meaningfully to the upside. Commentary on pricing, supply tightness, and agentic workload demand will be the key signals to watch on the call.
The GPU side of the story also remains important. AMD’s long-term data center AI revenue targets depend on continued GPU traction alongside the CPU recovery. If both businesses are accelerating simultaneously, the case for a re-rating toward DA Davidson’s $375 target becomes significantly harder to argue against.
Related: Stifel resets AMD price target for rest of 2026
