Barclays raises AMD price target following Saudi deal

On May 16, 2025, Advanced Micro Devices (AMD) announced a significant partnership with Saudi Arabian company Humain, which will involve supplying chips for building 500 megawatts of AI capacity. In light of this announcement, Barclays' analyst Tom O'Malley raised AMD's price target by $20 to a total of $130, signifying a potential upside of 13%. This price adjustment comes after AMD's stock price had soared nearly 12% over the week, further bolstered by the company's previous decision to authorize $6 billion in share buybacks. The partnership with Humain is particularly noteworthy as it is backed by Saudi Arabia's Public Investment Fund, which is committing $10 billion to the chip deployment project. O'Malley expressed optimism about the Humain partnership, highlighting its significance among recent company wins. The deployment of chips is expected to proceed across multiple generations, starting with the MI355 series and advancing to full rack scale solutions at the MI400 level, which will integrate AMD CPUs, GPUs, network interface cards (NiCs), and software. The analyst projected that the ramp-up from Humain might occur aggressively in increments of 75-100 megawatts, with the $10 billion investment seen as a target rather than a cap for the project. Additionally, O'Malley indicated that AMD is in discussions with another “Tier 1” customer, and more details about this potential partnership might be revealed in the upcoming month. It is worth noting that AMD's guidance for the second half of the year reflects a more conservative outlook in response to the broader macroeconomic environment, rather than any concrete order downticks. Despite the recent rally, AMD's stock has still experienced a decline of almost 5% over the year-to-date period, although analysts remain largely optimistic, with 35 out of 52 covering analysts giving it a strong buy or buy rating. As a result, AMD's stock saw a 30% increase over the past month, indicating strong market confidence in the company's future prospects following the announcements of strategic partnerships and financial maneuvers.