Advanced Micro Devices delivered a third-quarter earnings and revenue beat on Tuesday. You wouldn’t know it by looking at the stock reaction. For the third quarter , the company earned an adjusted $1.20 per share on revenue of $9.25. Sales increased 36% from this time last year. Analysts polled by LSEG had expected earnings of $1.16 and $8.74 billion in revenue. But the company sees an adjusted gross margin of 54.5% for its current quarter, meeting StreetAccount’s consensus of 54.5%. The in-line margin guidance, combined with lofty valuations heading into the report, kept shares under pressure after the earnings release. The stock, which traded at an elevated forward price-to-earnings ratio of 41, fell more than 5% in the premarket. “Drilling down to what we think was the most likely point of contention (considering revenue results/guide were solidly ahead of sell-side/buy-side bogeys, and gross margin was in line), a lack of stronger operating leverage in the model appears to be the most prominent concern,” wrote JPMorgan. Citi, meanwhile, blamed slowing quarter-over-quarter growth in AMD’s artificial intelligence business as a headwind. Here’s what sell-side analysts had to say. Goldman Sachs: neutral rating, $210 price target Analyst James Schneider’s target implies about 16% downside from Tuesday’s close. “We expect the stock to be range bound following a beat-and-raise quarter driven by upside in the Datacenter and Client segments, largely offset by lower margins — against a backdrop of elevated expectations. … On the margin, we believe AMD’s strong Datacenter ramp is essentially in line with the Street expectations, but the lack of near-term financial leverage — both on gross margin and OpEx — could be viewed as disappointing. We remain Neutral on the stock given the potential funding risks tied to the business and likely high customer concentration for AMD’s GPU datacenter business. However, we could be more constructive if we gain incremental confidence on the revenue stream and execution timeline for this deal in the coming quarters.” Deutsche Bank: hold, $250 Deutsche Bank’s forecast is less than 1% away from AMD’s Tuesday closing price of $250.05. “Overall, we believe AMD delivered another strong report/guide, albeit with little change to our estimates. We look forward to receiving updates on AMD’s financial targets on the co’s upcoming analyst meeting, with our general expectation being for AMD’s strong technology roadmap and execution to drive strong growth for the next few years. However, with these positive attributes/ drivers reflected in our model and little change to our estimates (~$10 EPS in 2027), we maintain our Hold rating with a $250 P/T (P/E of 25x).” Morgan Stanley: equal-weight, $260 Morgan Stanley’s target calls for 4% upside going forward. “AMD had upside in 3q, guided in line with our estimate/slightly above street for 4q revenues, with particular strength in gaming but upside in data center. Mgmt was constructive on MI355 but clearly the focus is next year’s rack scale products.” Citi: neutral, $260 “Yesterday after the close, AMD reported good results and guidance driven by higher client, gaming, and data center segment sales (combined 91% of 3Q25 revenue). The stock traded down AH we believe due to slowing QoQ growth in its AI business. We expect the company to raise its long-term guidance at its analyst day next week and we forecast AMD’s AI sales to grow 174% in C26E, although we believe the buy-side is already expecting that. We raise our price target but maintain our Neutral rating given high expectations from the buy-side.” JPMorgan: neutral, $270 Analyst Harlan Sur’s forecast is 8% above Tuesday’s close. “Results and guidance were solidly ahead of expectations, but clearly not enough to appease some investors given the after-hours action on the stock. Drilling down to what we think was the most likely point of contention (considering revenue results/guide were solidly ahead of sell-side/buy-side bogeys, and gross margin was in line), a lack of stronger operating leverage in the model appears to be the most prominent concern, with operating margin down Y/Y in Q3 and implied lower again Y/Y in Q4, even with revenue up ~36% and ~25% Y/Y, respectively. …We remain on the sidelines though as the stock appears fully valued to us at these levels, and we are cognizant of the execution risks that lie ahead for AMD as it ramps its first rack-scale AI system next year.” Barclays: neutral, $300 Barclays’ price target equates to 20% upside. “No new AI announcement with earnings but the company sounded confident across the CPU/GPU portfolio with a new LT model likely at the AD next week. The AI story is well understood with the OAI deal layering into numbers in the 2H of CY26 and the MI450 series representing another major inflection for the Instinct product line. …Net-net, we continue to see AMD as one of the best ways to play AI with the analyst day looking more like a positive catalyst.” UBS: buy, $300 “Set against the rally in shares into this report, we could see a pullback tomorrow. That said, we would not get cute here ahead of the Analyst Day because AMD probably lays out a path of $15-20 in EPS later this decade and AWS is probably still out there as a catalyst too (more likely at re-Invent in early December, we think).”
