Wells Fargo analyst Aaron Rakers just bumped his AMD price target from $505 to $615. The interesting part: it has nothing to do with GPUs or AI accelerators, the categories that usually dominate the AMD conversation.

Instead, the revision is entirely about server CPUs. Rakers now projects AMD will pull in $16 billion in server CPU revenue by 2026, climbing to $20.5 billion in 2027 and $25 billion by 2028.

The numbers behind the upgrade

Rakers, who holds a 5-star rating on TipRanks, maintains an Overweight rating on AMD. His updated earnings per share estimates tell the growth story in three acts: $7.15 for 2026, $13.40 for 2027, and $18.75 for 2028.

The $615 target applies a price-to-earnings multiple of 33 on that 2028 EPS estimate.

AMD’s stock has already been on a tear, hitting all-time highs after positive earnings results and accumulating multiple analyst upgrades throughout 2026. Rakers’ revision is the latest in a string of bullish calls, but it stands out for focusing squarely on the CPU business rather than the trendier GPU narrative.

Why CPUs still matter in the AI era

AMD’s EPYC processors have been steadily gaining market share against Intel’s Xeon line for several years now. The trajectory Rakers is modeling, from $16 billion to $25 billion in server CPU revenue over three years, suggests he believes that share gain is accelerating rather than plateauing.

Intel has struggled to maintain its historical dominance in the server market, dealing with manufacturing delays and competitive pressure from both AMD and Arm-based alternatives from companies like Ampere. Meanwhile, Arm-based server processors continue to gain traction in cloud environments, with Amazon’s Graviton chips and Microsoft’s Cobalt processors representing credible alternatives.

What this means for investors

The $615 price target represents meaningful upside from where AMD has been trading, even after its recent run to all-time highs. The valuation depends heavily on AMD executing against those 2028 projections, with a 33x P/E multiple applied to an estimate that’s still two years out.

Several investment firms, including UBS and Bank of America, have also updated their target prices in 2026 while citing improved market conditions for AMD’s CPU growth. The overall analyst consensus average price targets hover around $500 to $508.