AMD stock fell about 6% on Wednesday as a broad selloff in semiconductor shares weighed on the sector.
Despite this, multiple Wall Street firms raised their price targets and reaffirmed their bullish long-term views on the stock.
The broader weakness extended across major chipmakers.
Micron Technology dropped 9%, while Lam Research declined more than 4% and Intel fell 5%.
The VanEck Semiconductor ETF (SMH) also lost nearly 3%, reflecting broad pressure on semiconductor stocks.
Separately, ARK Invest reduced its exposure to AMD by selling 9,742 shares through its ARK Innovation ETF (ARKK), a transaction valued at approximately $5.34 million.
The move continued a recent trend of trimming the firm’s AMD holdings.
Analysts raise price targets on AI growth expectations
Despite the decline in AMD shares, several brokerages became more optimistic about the company’s long-term prospects, citing expanding artificial intelligence opportunities and improving supply chain conditions.
UBS maintained its Buy rating on AMD and increased its 12-month price target to $700 from $670.
The brokerage said AMD is positioned to win additional customers for its AI accelerators and expand its data center semiconductor business.
“Customer-wise, we have always maintained that Amazon will be a major MI450x customer, and we now believe Anthropic might also be on the customer list,” analyst Timothy Arcuri wrote Wednesday to clients.
“Additionally, we could see AMD partnering with [Cerebras Systems] on a fast inference solution … and maybe announcing a deeper and broader push into custom [Application-Specific Integrated Circuits] for the data center.”
UBS also pointed to easing capacity constraints at Taiwan Semiconductor Manufacturing, which provides advanced packaging services for AMD’s AI accelerator chips.
“Overall, our supply chain work is very bullish, with significant upticks in [Chip-on-Wafer-on-Substrate ] allocation for C2027,” Arcuri wrote.
The brokerage also identified AMD’s “Advancing AI 2026” event, scheduled for July 22-23 in San Francisco, as a potential catalyst for the stock.
KeyBanc also maintained its Overweight rating while raising its price target to $725 from $530.
The firm cited expanding server CPU production capacity and the expected second-half 2026 ramp of AMD’s MI455 AI GPU and Helios platform.
KeyBanc expects AMD’s server CPU shipments to increase between 15% and 20% this year.
Bank of America raised its price target to $620 from $550, while TD Cowen increased its forecast to $675.
AI demand and China developments remain in focus
Analyst optimism comes after AMD shares more than doubled over the past three months, climbing 112% through Tuesday as demand for AI infrastructure accelerated.
The company has continued gaining market share in server processors while securing agreements with artificial intelligence companies, including OpenAI.
According to LSEG data, 45 of the 55 analysts covering AMD currently rate the stock either Buy or Strong Buy.
Investor sentiment toward semiconductor stocks also received support from Goldman Sachs data cited by The Kobeissi Letter, which showed hedge funds purchased US semiconductor shares last week at the fastest pace in at least three-and-a-half years.
Semiconductor stocks now represent about 10% of total hedge fund exposure, below the nearly 14% peak recorded in May.
AMD also remained in focus after Reuters reported that Zhuhai Hengqin Yunxiang Zhisheng Network Technology, a subsidiary of Chinese cloud computing company Kingsoft, received US approval to use certain AMD AI chips that compete with Nvidia’s H200 products.
China remains an important market for AMD, accounting for more than 22% of the company’s fiscal 2025 sales, compared with more than 24% in fiscal 2024.
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