Citi resets AMD stock price target on key move

For months, one of Wall Street's most closely watched chip analysts held a skeptical line on AMD while the stock rode the broader AI rally. On June 12, that changed. Citi analyst Atif Malik upgraded AMD to Buy from Neutral and raised his price target to $575 from $460, and shares jumped 4.73% the same day, according to Stocktwits.

The new target implies more than 17% upside from Thursday's close. Citi's reasoning, in the bank's own words, was "increased conviction in AMD's GPU business and server CPU tailwinds."

In practice, that means two things changed: Malik now believes AMD's graphics chip business is worth far more than the market is pricing in, and he raised his long-term forecast for the entire CPU market on top of that.

The GPU shift is the bigger of the two, and it is built around one customer in particular.

The AMD number Citi thinks the market has wrong

Malik's case rests on a specific gap between what AMD's stock implies and what Citi thinks will actually happen. According to Investing.com, Citi estimates AMD's current share price is pricing in only a 60% probability that the company surpasses $50 billion in GPU revenue by 2028. Citi's own forecast goes further: $33 billion in AI GPU revenue in 2027, up 137% year-over-year, and $50.8 billion in 2028, according to TipRanks.

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That gap, between a 60% probability priced in and Citi's own base case of $50.8 billion by 2028, is the entire thesis.

Malik's note argued that "the market has yet to fully recognize AMD as a legit second source in the GPU market," a framing that has been the headline takeaway across Wall Street coverage of the call.

Why Meta is at the center of the AMD bull case

The Meta relationship is where Citi's numbers become concrete rather than aspirational. AMD and Meta previously announced a six-gigawatt, four-year AI infrastructure partnership built around custom AMD Instinct MI450 chips, including a warrant for 160 million shares of AMD common stock. The first one-gigawatt tranche begins ramping in the second half of 2026 and into 2027.

Citi's model translates that gigawatt commitment directly into revenue: each gigawatt of data center capacity corresponds to roughly $15 billion in revenue for AMD.

On a six-gigawatt deal, that math is the foundation for Malik's $33 billion and $50.8 billion AI GPU revenue estimates.

Citi also argues the custom MI450 chips give Meta a lower total cost of ownership than buying merchant GPUs from other suppliers, which is the operational reason Citi believes Meta keeps expanding the relationship rather than diversifying away from it.

How Citi built its $575 AMD price target

The headline number obscures how granular Citi's valuation work actually is. The $575 target comes from a sum-of-the-parts model that values AMD's data center GPU business at $281 per share on its own, more than the entire stock traded for before the upgrade.

The CPU business is valued separately at $204 per share, with the remaining value coming from AMD's client, gaming, and embedded segments plus roughly $35 per share in net cash, according to Investing.com.

That breakdown matters because it shows Citi is not simply raising a multiple on the existing business. The bank is arguing the GPU segment alone is worth more than what the market currently assigns to all of AMD combined, with the CPU business, historically the core of how investors have valued the company, treated as additional value on top.

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AMD's CPU story has not disappeared either

Even as the GPU thesis dominates the headlines, Citi's note also raised its long-term CPU forecast.

The bank lifted its 2030 total addressable market estimate for CPUs to $136.7 billion from $131.5 billion, representing a 36% compound annual growth rate from $29.3 billion in 2025, according to GuruFocus. Much of that growth is tied to demand for agentic CPUs, chips designed for AI systems capable of operating autonomously rather than simply responding to prompts.

Citi's revised 2026 to 2028 earnings estimates for AMD now sit 12% to 13% above Wall Street consensus, according to CNBC.

"We believe Meta will be a significantly larger customer of AMD's AI products, especially GPUs, than the street is expecting," Malik wrote in the note.

What the AMD upgrade actually changes

The practical effect of Citi's call is a reframing rather than a new data point.

The Meta deal, the MI450 chips, and AMD's CPU roadmap were all known before June 12. What changed is that one of the most closely watched analysts on the Street stopped treating AMD as primarily a CPU company that also sells some GPUs, and started modeling it as a company where the GPU business alone could be worth more than the entire current valuation.

Whether that reframing sticks depends on execution that is still years away.

The first gigawatt of the Meta deal does not begin ramping until the second half of 2026, and the $50.8 billion 2028 GPU revenue figure that anchors the bull case is itself the more aggressive end of Citi's range. For now, the market's initial reaction, a near 5% jump in a single session, suggests at least some investors were waiting for exactly this kind of reframing to arrive.

Related: Bank of America resets AMD stock price target